ECI 2019/Q1: Austria’s competitiveness on the upswing

"Austria's competitiveness is on the upswing," says Tobias Thomas, Director of the economic research institute EcoAustria. These are the findings of the current EcoAustria Competitiveness Index (ECI), which measures the development of competitiveness on a quarterly basis using net exports and direct investments at home and abroad.

Compared to the previous quarter, Austria's ECI has risen sharply by 2.1 points and is now only just below the 2016 level at 99.8 points. In addition to higher net exports, direct investment from abroad in particular is responsible for the latest increase. "The prospect of better framework conditions is having a positive effect on investments from abroad. More planning security for companies with regard to the tax burden in the future would be helpful to stabilize this trend," says Thomas.

In addition to corporate taxation, a significant reduction in the tax burden on labor is crucial for Austria as a business location. "The difference between what companies pay per hour worked and what employees receive as the fruits of their labor is far too great in Austria," says Thomas. Yet the opportunity for reform is currently favorable: tax revenues are bubbling up and the national debt is falling. However, lower GDP growth and the cooling of the business climate point to a slowdown in the economy.

The current results of the ECI are presented in the EcoAustria Competitiveness Monitor Q1/2019. Details on the methodology of the EcoAustria Competitiveness Index are documented in EcoAustria Research Paper No. 9.