Export Boom Favoured Länder with an Important Manufacturing Sector

The Austrian economy continued to grow strongly in 2007, gross value added increased by 3.3 percent in real terms. However, a slow-down set in during the second half of the year, with the rate of growth dropping 0.4 percentage points below the figure for the first half (+3.5 percent). Consistently high export growth and lively investment activities were the main growth drivers, while private consumer demand remained moderate. These demand factors influenced the pattern of the short-term regional economic developments, which where characterised by a significant east-west gradient. The dynamic development of exports favoured economic growth in the western Länder, with companies taking advantage of their geographical location for close supplier relations with large neighbouring EU countries (especially Germany). Gross value added increased by 3.9 percent in the western region, by 3.2 percent in the southern region and by 2.8 percent in the eastern region of Austria.