Austria is an investment hub for many of our clients. The country acts as a gateway to the single European market as a member of the EU. Its services industry accounts for two thirds of its GDP, and tourism is the country's fastest-growing sector. Austria's industrial sector is mostly made up of small and medium-sized enterprises, but is a major player on the world stage. We make sure our clients make sound business choices in Austria, using our unique Total Analysis model. We keep them informed of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. We give further in-depth analysis on six of Austria's most important industries. Combining interactive data and forecasting with our risk-assessed and results-proven analysis gives our clients a winning approach. We help you, as our client, identify the opportunities and risks – making doing business in Austria simple.
Austria Country Risk
Austrian real GDP growth will accelerate in 2016 but economic activity will lag behind regional peers, despite improving external demand from the eurozone.
At a federal level, support for the Freedom Party (FPO) is continually on par with that of the SPO-OVP coalition. Given its strong performance in the Styria and Burgenland elections, we expect the FPO party to make further gains in the Upper Austria and Viennese elections in late 2015.
Key Risks To Outlook
Lacklustre consumer spending could result in a lower negative contribution from imports. This would bolster growth over the year though we do not feel this could significant deviate from forecasts in 2015.
Continually robust support for the far right Freedom Party in 2014 remains a...
Austria Industry Coverage (8)
Austria Commercial Banking
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BMI View: Austria's construction industry will register a ninth consecutive year of negative growth in 2016, coming in at -1.1% and a value of USD18.8bn. From 2017 to the end of our forecast period in 2024 we predict muted positive growth sustained by an improving economy and EU investment into major rail development.
Latest Updates And Structural Trends
Construction and infrastructure industry growth will remain negative in 2016 at -1.1%, before entering a positive trend of weak positive growth to 2024.
OBB secured a EUR1.8bn (USD1.91bn) loan from the EIB to expand and modernise rail routes in the south of the country.
Residential construction and large infrastructure projects have struggled to gain public investment with the government pursuing a conservative budget...
Austria Medical Devices
BMI Industry View : The Austrian medical device market is well established, with above average per capita spending at just under USD300. We anticipate that the market will see below average growth within the Western Europe region. In keeping with most developed markets, the main growth drivers in the Austrian market are the increasing health needs of the ageing population and the search for new technologies to improve patient outcomes and increase health service efficiency.
Headline Industry Forecasts
We forecast that the market will grow at a US dollar 2014-2019 CAGR of 2.4%, which will see the market increase from USD2,307.4mn in 2014 to USD2,598.8mn in 2019. The lower dollar growth rate reflects a...
BMI View: Though not counted among Europe's largest metals producers, Austria is building a worldwide reputation as a developer of high-end steel products, a development that is helping to insulate local companies from many of the challenges facing European steelmakers.The continued expansion of industry leader Voestalpine should ensure that domestic steel output grows at a steady, albeit marginal, rate over the next few years.
As a mid-range producer, the fortunes of Austria's steel sector remain very much tied to those of the wider European steel industry. Over recent years, the region's steelmakers have faced a growing list of challenges that have included economic recession, a collapse in demand and falling...
Pharmaceuticals & Healthcare
Austria Pharmaceuticals & Healthcare
BMI View: While we view the Austrian pharmaceutical and healthcare market as relatively stable and insulated from sudden downgrades, we highlight that certain economic factors pose a risk to public spending in particular. However, the country's economy is poised to grow in 2016 and therefore, we believe pharmaceutical spending will post modest growth over the medium term, as the government links growth in public healthcare expenditure with nominal GDP growth.
Headline Expenditure Projections
Pharmaceuticals: EUR6.44bn (USD7.08bn) in 2015 to EUR6.55bn (USD7.01bn) in 2016; 1.7% in local currency terms and -1.1% in US dollar terms. Forecasts in USD terms slightly increased from the previous quarter.
BMI View: The focus of the Austrian power sector is increasingly on the development of renewable energy, supported by ambitious government targets and generous subsidies and feed-in-tariffs. Thermal energy will see more limited investment, in part due to falling regional energy prices which is dampening investor interest, although we do expect to see some growth in natural gas generation which will offset the contraction in coal and oil over the forecast period and provide a balancing load service as renewables output grows.
BMI View : Austria continues to be one of the largest markets for renewable energy and also its non-hydro sector, led by wind power, is seeing stable growth. Although 2015 and 2016 are seeing a steady slowing of such growth, the country is on track to meet its 2020 targets long before the deadline and become one of the countries that may exceed its targets. Investments in the sector are generally undermined by an expected shift in the regulatory framework as well as low electricity costs and no clear strategy for renewables beyond 2020.
BMI View : Consolidation has not led to higher prices, as the no-frills segment continues to dominate. Customers are now accustomed to cheaper prices for good-enough services, and are unlikely to move onto more premium plans unless operators can make the case. This is not only apparent in terms of mobile services, with 3G continuing to dominate, but also in the broadband market, through dedicated mobile broadband and DSL. Investments have been made in VDSL and DOCSIS, but the market's structure towards flexibility also hinders the movement towards convergence.
The mobile market reported its first y-o-y growth in eight quarters in Q315, ending September with 13.12mn subscribers
Dedicated mobile broadband remains the largest component of all broadband connections...