COVID-19 Crisis – Rebound After Slump in Spring 2020

The COVID-19 pandemic resulted in significant declines in Austrian foreign trade in goods. The sharp slump during the first wave of the pandemic in the spring of 2020 was followed by a rebound in the summer months and, despite a renewed tightening of pandemic protection measures in the fall, only a slight dampening of the trend toward the end of the year. This development in foreign trade was also closely followed by production in the manufacture of goods, whereby the manufacturers of consumer goods not intended for daily use were hit the hardest. There were also large losses in the motor vehicle industry, metal production and metalworking, mechanical engineering and the manufacture of electrical equipment. The year was characterised by a sharp downturn in sentiment in the first months of the pandemic, associated with an increase in economic uncertainty and a decrease in capacity utilisation. The following months saw a rebound of economic activity, which was also accompanied by a gradual reduction in uncertainty. The COVID-19 crisis also led to a slump in aggregate investments. Yet, investment developed differently across categories. While investments in equipment declined sharply, technological developments led to weak growth in investments into intangible fixed assets.