Survey results on the current Austrian business and investment climate, confidence and opinion in the US

Transcription

1 Survey results on the current Austrian business and investment climate, confidence and opinion in the US A successful year and an optimistic outlook yet heightened uncertainty and increased cautiousness Every year, Advantage Austria/the Austrian Trade Commission, the official representative of Austrian businesses, investments and the economy abroad, conducts a survey among the Austrian foreign direct investments on the current, recent and expected economic and political developments and how these affect Austrian business and investments interests in the US. By and large, we are experiencing a phenomenon that appears to be consistent with the international media coverage and attention of the Trump administration s first year in office: a largely negative or polarizing commentary on the 45 th US President s admittedly often volatile governance and leadership but, to some degree paradoxically, surprisingly sound macroeconomic fundamentals and overall development. This trend seems to be confirmed by Managing Directors and CEOs of Austrian subsidiary and investments in the US: 63% respond, that the business climate has improved in the last 12 months, 29% see it as neutral, and only 8% see a negative economic development. For the coming 12 months, the outlook appears similar: although only 38% expect an improvement, 58% project an overall unchanged business climate and only 4% suspect a change for the worse:

2 In the last 12 months, 2/3 of participating subsidiaries were able to increase their turnover and roughly the same amount of companies expect increasing turnover, orders, invested capital and capacity utilization in the next year. Room for improvement and optimization is overwhelmingly seen in the areas of taxes and duties and predictable economic policies, to a lesser degree also in political stability ; President Trump s often difficult to predict and impulsive leadership style might have affected these results: Concerning market-related areas of improvement, optimization is most prominently seen in relation to the workforce, where especially its qualification, availability and productivity could benefit from improvements, as well as high cost of raw materials, according to the participating Austrian subsidiaries:

3 Since the Donald Trump s assumption of office on January 20th 2017, the overall macroeconomic data have shown positive and solid developments (GDP growth 2017 at 2.2% or higher, Inflation: 2%, Unemployment rate: 4.1% and the lowest in 17 years, etc ). In spite of previously anticipated stock-market turmoil, the Dow Jones rallied from one record-high to the next (70 in 2017, outperforming the indices previous record year of 1995 with 69) closing with 24,792 on December, 18 th while the Nasdaq Composite for the first time broke through the 7,000-point ceiling. It remains unclear however, to which degree this can be attributed to Trump s presidency, and more-so to be seen, how long-term sustainable and consistent this economic performance ultimately proves to be. Aside from new trade and market access barriers, Austrian foreign direct investments do regard political uncertainty as the second biggest perceived risk in their medium-term business development in the US, ahead of economic uncertainty : Unsicherheit, die vorerst größten Risiken für ausländische Unternehmen.

4 Nonetheless, the United States continue to be the most important overseas market for Austrian exporters (by a large margin ahead of China) and also from the perspective of the Advantage Austria/the Austrian Trade Commission, we experience continuously high and growing interest from exporters and investors. From an Austrian perspective, trade relations have shown a strong development: in Q1-Q3 2017, Austrian exports grew by 8.8% to USD 8.45bn, while imports of US goods grew by even 16.4% to USD 5.48bn trade volume expanded significantly and made the US the second biggest market for Austrian exports overall, behind Germany, but narrowly beating out Italy, France and Switzerland. While we experienced a slight dip in Austrian exports to the US in 2016 (-3.9% to USD 9,3bn), this must be seen as a baseline effect in the larger context, after a record year in 2015, when exports to the US soared by 16.7%. In spite of President Trump s volatile and betimes less predictable style of governance and leadership, one should not ignore or dismiss the sound and impressive economic developments, which were largely confirmed by the participating Austrian investors of our yearly survey. The US continue to be the world s biggest economy and single-market for the foreseeable future, and as Austria s second most important export destination of imminent importance for our economy and investors and we are confident that there is further market potential and

5 room for growth - Advantage Austria/the Austrian Trade Commission will continue to gladly assist and support Austrian economic and business interests in the US. The survey results in its entirety are attached/available for download.