Economic Slowdown Continued

Austrian GDP grew by 0.3 percent in the first quarter of 2019 compared to the previous period (after +0.4 percent in the fourth quarter of 2018). Thus, economic slowdown that began in mid-2018 continued. Compared to the previous year, unadjusted GDP grew by 1.1 percent in the first quarter. The late Easter date (Easter falls this year in April) and the number of working days in the first quarter (minus 1 working day) dampened the result.

The seasonally and working-day adjusted GDP growth (key-figure according to Eurostat) was also 0.3 percent in the first quarter (fourth quarter of 2018: 0.3 percent revised).

Growth in the first quarter was mainly driven by domestic demand, while growth contribution by foreign trade almost stagnated. The robust momentum in consumption continued. Private consumption expenditure (including non-profit private organizations) increased by 0.4 percent. Public consumption expenditure expanded to the same extent. Investment demand was also good, although momentum slowed compared with the first half of 2018. Demand for gross fixed capital formation rose by 0.6 percent, with construction investment providing positive impetus.

Imports also rose moderately (+0.4 percent) in line with investment demand. Since exports expanded to the same degree, net exports made hardly any contribution to GDP growth in the first quarter. Starting from the high momentum of the first half of 2018, both the growth rate of exports and imports slowed down.

At the same time, the industrial economy continued to lose momentum in the first quarter of 2019. Value added in the manufacture industry fell by 0.3 percent (fourth quarter of 2018 +0.1 percent). In contrast, the construction industry continued its strong growth, with value added rising again by 0.6 percent in the first quarter. Market services also supported economic growth. In the accommodation and food service activities, value added increased by 1.2 percent, while it stagnated in the retail sector.