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Foreign investments on the rise

International enterprises have increased their investments in Austria.

The Austrian Business Agency (ABA), which is in charge of coordinating assistance for foreign firms which are interested in settling in Austria, said yesterday (Thurs) that 183 international companies opened offices and put industrial facilities in operation in Austria in 2011. This is a decline of 15 compared to 2010, according to ABA officials. However, investments soared by around a third to 296.2 million Euros at the same time.

ABA figures also show that companies which started doing business in Austria last year created 1,822 jobs in the country, up by more than 30 per cent compared to the year before. One of the biggest investors is BMW. The German car manufacturer decided to manage its operations in Central and Eastern Europe (CEE) from Salzburg last year. German companies are strongly represented among all firms which came to Austria last year. Around four in 10 of the companies have their headquarters in Germany. No other foreign economy claims a higher stake among enterprises which opened offices in Austria in the past year.

ABA officials said yesterday they were "cautiously optimistic" about the number of firms coming to Austria in the coming years and their investment expenditure. The agency said a continuation of the upward trend was possible despite bad news for both the domestic and the European economy. Olli Rehn, the European commissioner for economic and financial affairs, said earlier this week that the Eurozone was currently going through a "mild recession". The term Eurozone describes the 17 European Union (EU) member countries which use the Euro. Austria has been part of the Eurozone since 2002.

Rehn explained that the Eurozone’s average gross domestic product (GDP) edged down by 0.3 per cent from the final quarter of 2010 to the same period of last year. The Swedish politician said he was confident that a turnaround could be achieved in the next few months because of evident signals for a stabilisation of the situation. Austria’s GDP decreased by 0.1 per cent from the final three months in 2010 to the same time span in 2011, according to the European Commission (EC).

The Austrian Institute for Economic Research (WIFO) said in its most recent economic forecast that Austrian GDP could rise by 0.4 per cent from 2011 to 2012. WIFO added that the country’s economy had the power to grow by 1.6 per cent from this to next year but also warned from a rise in unemployment. Inflation will range around two per cent this year, according to the research institute.

News that 183 foreign businesses came to Austria last year follows Manfred Juraczka’s criticism of the Viennese government regarding the economic condition of the city. Juraczka, who was elected as new chairman of the Viennese People’s Party (ÖVP) last month, said Vienna was at risk of being overtaken by its neighbouring province, Lower Austria.

The conservative politician said the capital’s jobless rate was rising while more and more firms relocate to Lower Austria. Juraczka claimed businesspeople were put off by the federal capital’s increasing taxes while Lower Austria’s economic agency Ecoplus managed to lure dozens of previously Vienna-based companies to the province in the past years.

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