Austria’s investment outlook: economy well on track, according to annual “EIB Survey on Investment and Investment Finance” (EIBIS)

(, Vienna)
  • Post-crisis investment activity recovered faster than for EU as a whole
  • R&D investment on the rise
  • Less rigid regulatory framework for business and labour market could further enhance investment

Austria is a structurally sound economy with a high quality of infrastructure and capital. Post-crisis, investment activity recovered faster than for the EU as a whole, powered most recently by investment in machinery and equipment. R&D investment in relation to GDP is also on the rise in Austria, driven particularly by large firms, although some innovative firms still face credit constraints. These companies should diversify their funding base to strengthen future competitiveness. At the same time, Austria needs to improve its financial ecosystem for alternative forms of investment funding.

These are the main findings of the annual EIB Survey 2017 on Investment and Investment Finance (EIBIS) in Austria. The findings were discussed on 16 April 2018 at a conference in Vienna organized jointly by the European Investment Bank (EIB) and the National Bank of Austria (OeNB). The latest edition of the traditional EIB corporate survey was complemented by a one-off municipal survey, providing additional valuable information about local authorities’ investment needs and capital accumulation barriers at local level.

Andrew McDowell, Vice-President of the EU bank and responsible for the EIB’s business in Austria, emphasized at the conference: “The Austrian economy is well under way. Nearly nine out of ten Austrian firms invested in 2017, only 12% of the companies reported investing too little over the last three years. This is one of the smallest investment gaps in Europe. However, some companies, in particular very innovative firms, are still facing funding constraints. For these firms a more diversified form of finance is needed, which can be provided via collateral and guarantee products from the EIB Group in an environment of abundant liquidity.”

Debora Revoltella, Director of the Economic Department at the European Investment Bank (EIB), underlined the fact that: “Austria´s economy is sound. Post-crisis investment activity recovered faster than for the EU as a whole. Nevertheless, more firms in Austria than on average in the EU regard the business and labour market regulatory environment and skill mismatches as major obstacles to investment. This is where national authorities should act swiftly. If not, Austria risks hampering future investment.”

Ewald Nowotny, Governor of the OeNB, emphasized the contribution of macroeconomic stability to investment spending. “Price stability makes the investment environment better foreseeable and yields better investment decisions. Well-regulated and well-capitalized banks reduce uncertainty in credit supply and are less prone to financial crises. Good regulation, effective supervision and sustainable growth do not contradict each other: they go hand in hand.”

Main findings of the EIBIS in a nutshell:
At the corporate level, investment activity in Austria is strong. About 86% of Austrian firms invested in 2017. According to the self-assessment of the surveyed companies, Austrian firms rank at the top in the EU in terms of the high energy efficiency of their corporate building stock and state-of-the-art machinery and equipment. Furthermore, R&D and innovation is high on the agenda. 12% of Austrian firms can be classified as leading innovators. These companies spend actively on R&D and develop products new to the country and to the global market. In terms of the share of leading innovators, Austria ranks among the best in the EU. In addition, Austria hosts 7.8% of incremental innovators, which develop products new to the company and report substantial R&D expenditures. Most innovation in Austria is concentrated among medium-sized and large firms.

At the local authority level, Austrian municipalities assess the quality of their infrastructure as better than the EU average and also report smaller investment gaps than the EU average. The main obstacles to infrastructure investment at the municipal level, according to the EIB Investment Survey, relate to budgetary, political and regulatory instability and technical capacity.

Background information

About EIB and EIBIS
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

This year marks the 60th anniversary of the European Investment Bank, which was created in 1958 by the Treaty of Rome signed the previous year establishing the European Economic Community, now the European Union (EU). In its 60 years of operations, the EIB has disbursed EUR 1.1tn for projects in 162 countries, making it the world's largest multilateral lender. In Austria, where the EIB started operations in 1973, the Bank has since financed 344 projects and investment programmes worth approximately EUR 27bn across the whole country and in all sectors of activity, with transport as the leading sector.

The annual EIB Survey on Investment and Investment Finance (EIBIS) is an EU-wide survey that gathers qualitative and quantitative information from 12,500 SMEs and larger non-financial companies in all 28 EU Member States on investment activities, their financing sources and needs, and challenges that businesses face. The EIBIS reveals that although investment is recovering in Europe, that recovery is slow and uneven among countries and asset classes. Understanding the reasons behind this slow recovery in investment is key to defining appropriate intervention policies. This year the EIBIS was complemented by a one-off municipal survey, where we asked local authorities about their investment needs and their barriers to capital accumulation.

About OeNB
The Oesterreichische Nationalbank (OeNB) is the central bank of the Republic of Austria and as such an integral part of the European System of Central Banks (ESCB). The OeNB contributes, in the public interest, to monetary and economic policy decision-making in Austria and the euro area. In fulfilling this role, the OeNB is independent and not bound by any instructions. The OeNB adheres to the guiding principles “stability and security.”