On August 1, the Austrian Ministry for Social Affairs issued a statement boasting of record-high employment numbers. In the preceding month, July 2019, more than 3.89 million people in Austria were employed. Global trade tensions are spiraling, profit warnings are being issued and equity markets are in turmoil – but it seems the Austrian economy is doing just fine.
When it comes to growth, Austria has “decoupled itself to some degree” from Germany, remarked Johannes Kopf, head of Austria’s Public Employment Service (AMS). That’s why the current slowdown in Europe’s biggest economy only partly affects the domestic economy: “Austria is tightly linked with its Eastern European neighbors, and domestic demand is strong as well.” Kopf expects the Austrian economy to expand steadily by 1.5% this year and in 2020, and for unemployment to stay low.
A Healthy Profile
Moreover, Austria’s demographic profile is favorable when compared to most neighbors, including Germany. Thanks mainly to immigration from Central and Eastern Europe, Austria’s working-age population is growing fast. “Between 2010 and 2018, almost 500,000 new workers joined the labor market – only 100,000 of those were Austrian citizens,” explained Kopf. The total number of jobs has increased by over 10% in the last ten years.
“Those that come are young, well-educated and skilled,” said Kopf, “which is a massive boon for our economy and helps us mitigate the effects of an aging population.” This also makes Vienna and Austria more attractive locations for new international businesses, as we for immigrants from high wage countries: The number of Germans working in Austria, for instance, has doubled since 2004 – from 50,000 to 100,000. Employment is on the rise.
A Steady Labor Market
Despite the arrival of new workers, unemployment has fallen for 30 months in a row, starting in February 2017. It fell by another 4.5% this July, with 15,000 jobseekers finding new positions. The national unemployment rate is now 6.5% – which means some 325,000 people are looking for work (of whom 53,000 are in classes or training).
Others’ statistics look even better: Austrian unemployment stands at a healthy 4.5%, according to the European statistical agency Eurostat, which uses a different methodology and provides international comparisons.
For several years after the financial crisis, Austria had the lowest unemployment rate in the EU. Although recently overtaken by a number of countries, it’s remained within spitting distance of Central Europe peers like Croatia (7.1%), Slovakia (5.4%), Slovenia (4.4%), Hungary (3.4%), Germany (3.1%) and Czechia (1.2%).
Both during the mini-recession of 2011-12 and today, despite the global deceleration, Austria has managed to create jobs for large numbers of new workers – a striking win for the Alpine state’s labor market.