Austria

In-depth country-focused analysis on Austria's economic, political and operational risk environment, complemented by detailed sector insight

Austria

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.

Country Risk

Austria Country Risk

BMI View:

Core Views:

  • 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) exceeds that of either the SPO or OVP, which we expect to hold throughout 2016. The FPO is now the junior government coalition member in two Austrian states (Burgenland and Upper Austria).

Key Risks:

  • 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 2016 and 2017.

  • Continually robust support for the far right Freedom Party in 2016 remains a salient political risk consideration.

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Austria Industry Coverage (15)

Commercial Banking

Austria Commercial Banking

BMI View:

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Infrastructure

Austria Infrastructure

BMI View:

BMI View: Austria's construction industry will register a ninth consecutive year of negative growth in 2016, coming in at -0.2% and a value of USD20.5bn. From 2017 to the end of our forecast period in 2025, we predict muted positive growth sustained by an improving economy and EU investment into major rail development and residential building.

Latest Updates And Structural Trends

  • Construction and infrastructure industry growth will remain negative in 2016 at -0.2%, before entering a positive trend of weak positive growth to 2024.

  • The transport ministry is targeting USD28bn investment in rail and roads...

Medical Devices

Austria Medical Devices

BMI View:

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...

Metals

Austria Metals

BMI View:

BMI View: We have increased our 2016 tin price forecast to USD16,500/tonne owing to a stabilisation in the Chinese economy over Q116 that has boosted all industrial metal prices significantly over January-April. While we expect consolidation over the remainder of 2016, tin prices will continue to recover beyond 2016 as the global market posts sustained market deficits and inventories dwindle.

Global - Tin Supply, Demand & Price Forecasts
2014 2015e 2016f ...

Austria Metals

BMI View:

BMI view: We have revised our aluminium price forecast from USD1,575/tonne to USD1,600/tonne in 2016, as the tightening market provided an earlier than expected floor in Q116. Aluminium prices will gradually edge higher as the global market moves into a deficit by 2018.

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Global - Aluminium Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f

Austria Metals

BMI View:

BMI View: Despite the strong H116 iron ore price rally, prices will edge lower due to weakening Chinese consumption over the latter half of 2016. From 2017 onwards, iron ore prices will remain subdued as iron ore prices remain under pressure from an over-supplied seaborne market, driven by strong production growth in Australia and Brazil, and weak consumption growth in China.

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Global - Iron Ore Production Forecasts
2013 2014 2015e 2016f

Austria Metals

BMI View:

BMI View: We have revised down our average copper price forecast for 2016 to USD4,900/tonne. We expect prices to find a floor over the first half of 2016, and begin to stabilise thereafter, supported by production cuts and modest consumption growth.

Global - Copper Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f 2018f ...

Austria Metals

BMI View:

BMI View: We have raised our gold price forecast for 2016 to USD1,275/oz and have a new five-year price target of USD1,400/oz. We have turned more positive towards prices due to rising inflation pressures and our view that real rates will remain depressed in developed markets beyond 2016. A modest rise in prices will be insufficient to reverse the trend of weak mine investment and industry consolidation.

BMI Gold Forecasts
2014 2015 2016f ...

Austria Metals

BMI View:

BMI View: Global steel prices will remain subdued due to a persistent steel oversupply over the coming quarters. From 2017 onwards, steel prices will gradually edge higher as the global steel surplus will narrow due to Chinese supply moderation.

Steel Price Forecast
2014 2015 2016f 2017f 2018f 2019f...

Austria Metals

BMI View:

BMI View: We maintain our average zinc price forecast for 2016 of USD1,750/tonne. We expect zinc prices to reach a floor over the first half of 2016, and begin to stabilise thereafter, as production cuts shift the market to a deficit.

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Global - Zinc Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f 2018f

Austria Metals

BMI View:

BMI View: Lead prices will gradually edge higher as the global lead market will shift into deficit by 2017 as production growth will slow over the coming years.

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BMI Lead Price Forecast
Current* 2016f 2017f 2018f 2019f 2020f

Pharmaceuticals & Healthcare

Austria Pharmaceuticals & Healthcare

BMI View:

BMI View: Austria's healthcare system delivers high-quality services, with healthcare expenditure on a per capita basis among the highest in Europe. The country's economy is poised to grow in 2015 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: EUR6.34bn (USD8.49bn) in 2014 to EUR6.44bn (USD7.08bn) in 2015; 1.6% in local currency terms and -16.6% in US dollar terms. Forecasts increased from the previous quarter.

  • ...

Power

Austria Power

BMI View:

BMI View: Austria's power sector is mature and the domestic grid is extensive, ensuring near universal access to electricity and sufficient supply to meet current consumption demands. As a mature market, where public investment capacity is restricted, there are few development projects in the pipeline meaning total generation is expected to grow only slowly throughout the ten-year forecast to 2025. Consumption is expected to grow more rapidly and towards the end of the forecast period Austria is therefore likely to become a net importer, increasing its reliance on a more integrated European electricity grid.

Headline Power Forecasts (Austria 2015-2021)
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Renewables

Austria Renewables

BMI View:

BMI View : Austria continues to be one of the largest markets for renewable energy in Europe. Continuing low electricity prices however undermine the economic viability of non-hydro renewables projects. In addition, the lack of ambitious long-term renewables targets and the meeting of Austria's 2020 targets before the deadline provide little incentive for stronger renewables support in this unfavourable market climate. This has led to cuts in FiT rates for both solar and wind, meaning our forecasts see only limited growth beyond 2020, with overall non-hydro renewable generation expected to grow by an average of just 3.76% between 2016 and 2025.

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Renewables Headline Forecasts (Austria...

Telecommunications

Austria Telecommunications

BMI View:

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.

Key Data

  • 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...

Latest Austria Articles

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