Structural Problems of Manufacturing Trigger Regional Crises

With the weakening of economic activity in Austria, the regional disparities in economic growth have remained small for the second consecutive year. The regional development was characterised by structural problems in energy and wage intensive manufacturing branches. Manufacturing output dropped significantly especially in the old industrial and peripheral regions. The boom in construction tended to counterbalance the recessionary development in Styria, Upper Austria, and in Vorarlberg, but in the Eastern region, where manufacturing still benefited from domestic consumer demand and from exports to East-Central Europe, construction activity slackened. Tourism in the large cities and lake districts was hit hardest by the weakness in the international economy. The Western regions also fared better as far as production-related services are concerned.