Recovery Starts in the East

The momentum generated by international trade is gradually overcoming the restrictive internal stabilization concept. The incipient upswing shows an unusual regional pattern. The western Länder, accustomed to picking up positive trends of the economic cycle quickly, are lagging behind. Although their high-skilled industries have also started to rehire, structural problems in the tourism industry and its suppliers and – especially in the case of Salzburg – the loss of the bridge function between EC and EFTA have greater weight and are delaying the upswing. In the eastern region on the other hand, differences between regional developments have become even more distinct. While Lower Austria and Burgenland have been able to exploit the change in the geopolitical scene (Burgenland in particular experienced explosive growth), business in domestically focused Vienna suffered most from the stabilization concept. Upper Austria and Carinthia exploited the brisk demand for intermediate products and recovered rapidly. Styria got the best out of the upswing thanks to its stringent structural policy program which helped it shake off its reputation as a crisis region. In the last three months, 2,800 new jobs were created there, almost one third of the overall growth in Austria.