Cash-Flow in Manufacturing Affected by Weak Economy in 1991

Earning in the Austrian manufacturing sector declined in 1991; the cash-flow ratio dropped by 5 percent from 33 percent in 1990 to 30 percent in 1991. The economic slow-down affected almost all sectors of manufacturing; only those sectors, such as producers of building materials, which benefited from the high demand for construction, were able to stabilize the cash-flow at the high level of 1989 and 1990. The world-wide weakness in demand for capital goods as well as increased competition in Germany depressed earnings in the Austrian capital goods industry. Earnings in this sector fell well below the record high of 1990. The steep decline in earnings in the basic industries reflects not only the weakness in these markets but also persistent structural problems.