High Energy Prices Dampened Industrial Activity

In the first half of 2022, Austrian exports still benefitted from high order backlogs and an easing of international supply shortages, resulting in strong growth in exports of goods for the whole year. Import growth was mainly price-driven while import volume growth remained low. The energy price shock significantly worsened the terms of trade and further deteriorated Austria's balance of trade. Despite a dampening of economic expectations, industrial activity remained robust until the summer. In the second half of the year, the pace of manufacturing activities slowed. Although the business uncertainty increased significantly, the capacity utilisation rate remained slightly above average in 2022. The rise in energy prices impacted the production of energy-intensive intermediate goods. Gross capital expenditures declined slightly in 2022. The individual investment categories developed differently. While tangible investment in equipment decreased, investment in intangible assets increased.