ECI 2019/Q2: Competitiveness in a “have-eight” position

"Austria's economy is looking forward to upcoming decisions at home and abroad," says Tobias Thomas, Director of the economic research institute EcoAustria. Following a strong improvement in the previous quarter, the EcoAustria Competitiveness Index (ECI), which measures the development of competitiveness on the basis of net exports and direct investments at home and abroad on a quarterly basis, fell by 0.8 points to 98.5 points.

The slight decline in the ECI is due in particular to lower direct investments by Austrian companies abroad. In a European comparison, however, the decline in Austria's ECI is moderate. The EU average index fell significantly by 2.5 points. The drivers of this development include the Netherlands and Belgium in particular, which have particularly strong ties with the UK. Since the Brexit referendum, the Belgian ECI has fallen by a whopping 15 points. "In particular, the unclear outcome of Brexit and Trumpism in trade policy are causing uncertainty worldwide," says Tobias Thomas.

In Austria, competitiveness is still being held back by the high tax rate. "The high burden of taxes and non-wage labor costs on labor and companies should be significantly reduced in order to increase Austria's competitiveness. An end to cold progression and sustainable financing of pensions and care can also ensure that the tax ratio does not rise again," says Thomas.

The current results of the ECI are presented in the EcoAustria Competitiveness Monitor Q2/2019. Details on the methodology of the EcoAustria Competitiveness Index are documented in EcoAustria Research Paper No. 9.