Service providers, tourism and retail lost almost as much as in the first lockdown in the second quarter.
After a recovery in the third quarter, economic output in Austria fell sharply again at the end of the year, but not as massively as in spring 2020.
Consumer spending affected
In the fourth quarter the gross domestic product (GDP) was 4.3 percent below the previous quarter, in which there had been 12.0 percent plus between the lockdowns. Year-on-year, GDP fell by 7.8 percent, after a 4.2 percent decline in the third and 14.2 percent decline in the second quarter, said Wifo on Friday.
According to the Wirtschaftsforschungsinstitut (Wifo), the restrictions in the second lockdown had a negative impact on consumer spending by private households and added value in the service sectors. Tourism, trade, traffic as well as the areas of entertainment and recreation recorded significant losses in the fourth quarter, according to Wifo. In contrast, the construction and industrial sectors were more stable.
Consonance
In trade, accommodation, gastronomy and transport, value added fell by 19.7 percent in the last three months of 2020 compared to the previous quarter. In the case of other services, which include personal services such as hairdressing, art, entertainment and recreation, the decline was 25.2 percent, the Wifo determined in its flash estimate for the fourth quarter. In the third quarter, these two areas had increased by 32.9 and 39.2 percent respectively, but between April and June they had shrunk by 21.2 and 26.9 percent respectively.
At the same time, according to Wifo, consumer demand from private households (including private non-profit organizations) also fell sharply in the fourth quarter – by 8.3 percent compared to the previous quarter. In the previous quarter, private consumer spending rose by 12.9 percent quarter-on-quarter, while in the second quarter, at minus 11.2 percent, it fell even more than it was recently.
According to Wifo, the industrial and construction sectors were more stable towards the end of the year. In the fourth quarter, added value in industry increased by 1.0 percent, while in the construction industry it was 1.6 percent below the previous quarter.
Downturn
Foreign trade continued to be shaped by the global downturn. Exports fell by 1.1 percent on a quarterly basis (after a 16.1 percent increase in the third quarter and a 18.4 percent decrease in the second quarter, each compared to the previous quarter). Imports fell by 0.7 percent (after +12.1 percent and -17.4 percent before).
According to Wifo, the investment demand developed steadily, the gross fixed capital formation hardly changed.
On March 1st, Statistics Austria will report in detail on the GDP development in the fourth quarter and in the entire previous year. The next quarterly economic forecast from Wifo and the Institute for Advanced Studies (IHS) is planned for March 26th.
