Cyclical Upswing 2005-2007 Shorter than in Last Cycle

The cyclical upswing between 2005 and 2007 differs significantly in a number of ways from the last boom phase from 1997 to 2000. The most recent upswing was about one year shorter. A comparison of the two cycles also shows considerable differences in the structure of economic development: in both cycles, the upswing was triggered – as is typical of Austria – by the stimulation of exports in the wake of an improving economic performance of the country's most important trading partners. However, rising exports did not have a sufficient impact on investments on plant and equipment in the current economic cycle, which meant that capital expenditure did not pick up accordingly. At the same time, construction activities were booming, with public-sector contracts having a pro-cyclical effect.