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Leading Sectors for U.S. Exports and Investment

AGRICULTURAL SECTORS

Agricultural Fish and Forestry Sector Total

In 2007, Austria’s agriculture, fish and forestry imports worldwide amounted to $13.5 billion.  Exports reached $15.5 billion.  In total, 83 % of all imported agricultural products came from the EU territory and 76 % of all exported goods were delivered to EU Member States.  The major trading partner is Germany followed by Italy.  From the United States Austria imported $112.8 million worth of agricultural, fishery and forestry products not including significant and steadily increasing transshipments from other EU countries.  Major items from the United States in 2007 included dried fruits and nuts, convenience food products, wood and forestry products, tobacco, wine, and dog and cat food.  Best prospects for U.S. exporters include seafood, dried fruits and nuts, wine, snack foods, health and organic food products, and other consumer oriented products.

 Agricultural, Fish and Forestry Data Table (in $ million)

  2007 2008
(estimated) 		2009
(estimated) 
Total Market Size 13,459 10,100  10,900
Total Local Production 11,096 12,200  13,500 
Total Exports 15,462 17,500  19,000
Total Imports 13,459 15,400 16,400
Imports from the U.S.  113 117 120

2007 (base year) exchange rate: $1 = EUR 0.73
Note: Source for 2007 import and export figures is the Global Trade Atlas; All other figures are unofficial estimates.

Dried Fruits and Nuts

There is growing demand for wholesome/natural foods by Austrian consumers.  Demand for dried fruits & nuts as an ingredient for cereals, as well as dried fruit & nuts mixtures, is steadily rising.  Austrian production of dried fruits and nuts is limited to locally grown products like apples and walnuts.  Demand for organically produced dried fruits and nuts is also on a sharp increase.

The demand for dried fruits like raisins, prunes, apricots, cranberries and all kinds of nuts is still growing.  A large share of Austria’s cereal, fruits and nut mixtures consumption is sourced from Germany where these items are processed and packed and then exported to Austria.  Therefore, the actual import value of U.S. dried fruits and nuts to Austria is estimated to be much higher.  The EU and Turkey are the largest suppliers of these products to Austria.

Dried Fruits and Nuts Data Table (in $ million)

  2007

2008
(estimated)

2009
(estimated) 
Total Market Size 182 197 203
Total Local Production 90 92  93
Total Exports 30 42 40 
Total Imports 122 147 150
Imports from the U.S. 10 13 15

2007 (base year) exchange rate: $1 = EUR 0.73
Note: Source for 2007 import and export figures is the Global Trade Atlas; All other figures are unofficial estimates.

Wine

Austria’s average wine output is about 2.5 million hectoliters/year, which corresponds roughly to annual domestic wine consumption.  Large quantities of wine are imported and exported. The predominant suppliers are Italy, France, Germany, and Spain, which supply mostly red wines.

The import duty for non-EU wines is high.  However, there is a niche market for California wine, particularly high quality red wine.  Demand for good quality, inexpensive U.S. wine priced from 5 to 10 dollar a bottle is increasing.  The main competitors for U.S. wines are Chilean and Australian wines.

A large share of California wines is imported through German wholesalers and does not appear as a U.S. import in the official trade statistics.  The numbers below show only wines imported directly into Austria.

Wine Data Table (in $ million)

  2007

2008
(estimated)

2009
(estimated) 
Total Market Size 737 732 741
Total Local Production 640 645 650
Total Exports 144 169 147
Total Imports 241 256 265
Imports from the U.S. 3.3 4.1 4.5

2007 (base year) exchange rate: $1 = EUR 0.73
Note: Source for 2007 import and export figures is the Global Trade Atlas; All other figures are unofficial estimates.

Fish and Seafood

Austria's small fish production is limited mainly to trout and carp. Since Austria is a landlocked country, all marine fish, shellfish, and crustaceans must be imported. The main suppliers are Germany, Denmark, Netherlands, Italy, and Norway.

Consumption of seafood is rising. The reason for the general upward trend is the rising standard of living, health awareness, and the growing number of restaurants serving seafood.

As with most products, transshipments through other EU countries do not provide actual product origin.  Major U.S. seafood products are imported through Germany.

Fish and Seafood Data Table (in $ million)

  2007

2008
(estimated)

2009
(estimated) 
Total Market Size 410 433 441
Total Local Production 35 37 40
Total Exports 19 19 19
Total Imports 394 415 420
Imports from the U.S. 1.7 1.9 2.1

2007 (base year) exchange rate: $1 = EUR 0.73
Note: Source for 2007 import and export figures is the Global Trade Atlas; All other figures are unofficial estimates.

COMMERCIAL SECTORS

Overview

Showcase Europe provides U.S. exporters a broad perspective on Europe.  Organized around eight key sectors with the greatest market potential for U.S. exporters, Showcase Europe provides a framework for coordination and cooperation among the U.S. Department of Commerce's U.S. Commercial Service offices throughout Europe.  Sectors include aerospace, automotive, energy/power generation, environmental technologies, information and communication technologies, medical and pharmaceutical, safety/security, and travel and tourism.

In addition, the Quicktake Program provides an overview of market potential for a U.S. company's products from market specialists across Europe.  Surveys cover current and future demand, competition, and suggested next steps.

Key Links:   http://www.buyusa.gov/europe and http://www.buyusa.gov/quicktake

Computer Software and Services (CSP)

Computer Software and Services (CSP)
Data Table (in $ million)

  2007 2008
(estimated) 		2009
(estimated) 
Total Market Size 5,833.6 6,140.5 6,469.0
Total Local Production N/A N/A N/A
Total Exports N/A N/A N/A
Total Imports N/A N/A N/A
Imports from the U.S. 2,701.5 2,885.2 3,052.5
  • 2007 exchange rate: $1 = EUR 0.73
  • 2008 exchange rate: $1= EUR 0.68
  • Source: IDC Austria
  • Note: The above statistics are unofficial estimates.

Overview

In 2007, total packaged software sales reached approximately $1,882.6 billion (EUR 1,374.3 billion) of which application software represented $907.4 million (EUR 662.4 million) and systems infrastructure software represented $499.3 million (EUR 364.5 million).

The value of IT services totaled $3,951.0 billon (EUR 2884.2 billion) in 2007, representing a growth of 14.1% in U.S. dollar terms. Measured in EURO, the market expanded 4.6% compared to 2006.

Operations management accounted for $821.4 million (EUR 599.6 million); system implementation accounted for $1.583.6 billion (EUR 1.156.0 billion); support services $1,027.7 million (EUR 750.2 million); planning $339.0 million (EUR 247.5); and IT training and education $179.4 million (EUR 131.0 million). IT services revenues were stronger than expected in 2007, as end-user organizations continued placing new orders in an effort to align business and IT.

Hosted application management, network and desktop outsourcing services, and custom application development were among the most dynamic foundation markets last year. Among engagement categories, outsourcing services still claim the largest market share, followed by deploy and support services and systems integration services.

In 2007 the combined finance sector was the largest vertical market in Austria. The combined manufacturing sector placed second, while the combined government sector ranked as the third-largest vertical market. In 2007, the telecommunications sector was the fourth largest individual vertical market.

Enterprise forced to align business more tightly with technology will provide ample opportunity for vendors. The separation between business and IT is being eradicated, leading to new opportunities for services providers who recognize this trend. Additional drivers will be the increased focus on higher-value services and innovation and strong demand for green IT, datacenter services, and virtualization services.

U.S. companies interested in competing in the Austrian market should structure their services portfolios by industry and company size, deepen their relationships with their most loyal customers to increase revenues from these key accounts, focus on high level services to achieve high quality services delivery, recognize the possibilities in green IT and datacenter services and be aware that alignment of IT and business provides good opportunities for service vendors.

The expected annual growth rate for 2008 will be 7.2% for software and 4.6% for services. In 2009, the annual growth rate is estimated at 6.5% for software and 4.8% for services.

Siemens IT Solutions and Services was the leading IT services provider in Austria in 2007 based on revenue of $811.3 million and 17.9% market share. Raiffeisen Informatik ranked second, with $486.01 million revenue and a market share of 10%, and IBM ranked third, with $363.3 million and a market share of 8.0% in 2007.  The Federal Computing Center (BRZ) and T-Systems rounded out the top five IT services providers in Austria in 2007, with 6.9% and 5.1% shares.

The information system outsourcing foundation market accounted for the largest share of 16.0% of IT services revenue in 2007, followed by systems integration which accounted for 13.0% and hardware support and installation for 11.2%. The combined outsourcing category comprised 39.6% of the IT services market in Austria in 2007.

In 2007, the combined finance (banking, insurance and financial services) sector was the largest vertical market in Austria, with $1,018.29 million in services-related spending an accounted for a market share of 26.0%. The combined manufacturing sector ranked second with a market share of 19.4% based on services expenditure of $758.74 million. The combined government sector undertook IT services investment of $626.76 million last year to rank as the third-largest vertical sector, with 16.1% market share. The fourth largest sector was telecommunications, which accounted for 6.9% or $271.99 million of total IT services spending in Austria in 2007.

Asian software vendors will emerge to capture regional and global markets.  Many of these vendors will come from China, India, Korea and Malaysia, with a focus on enterprise applications such as ERM, CRM, and supply chain applications.

To compete, the software must be globally integrated and standardized with interfaces to all possible available packages.  Software solutions must take into consideration local regulations and laws governing hardware produced and sold by different manufacturers. European standards will facilitate entry into larger markets for application software.

It is critical that software be “user-friendly” whether marketed to personal users, business professionals or executives. It is vital that the software be “bug-free” and preferably written in German. Software packaging is important for retail sales and should be in German.

Leading drivers will include spending on security solutions, convergence of business and IT, streaming media, digital identity services, and the wireless rollout.

Enterprise security remains a fundamental aspect of a company’s IT infrastructure, and is reflected in spending on IT services around security. Nevertheless, it is difficult to determine exact security budgets, as expenditure is spread across many departments within a company. Themes such as physical security, information and transaction security and business continuity are being taken seriously, which creates a market for contingency planning, needs assessment, risk assessment, and management services. The market for security software totaled $84.6 million in 2007, an increase of 12.1% vis-à-vis 2006. The estimated growth rate for 2008 is 14%.

Best Products/Services

Accelerated adoption of virtualization will create opportunities for vendors of infrastructure software that deliver products that manage this increasingly virtualized IT environment, particularly around performance monitoring, provisioning, compliance reporting, cluster visibility, and change and configuration management.

Demand for multifunctional security solutions and security software is rising significantly. Security technology is an important foundational element for many of the leading growth drivers in the IT market today, including Web services and digital identity services.

Opportunities

The best opportunities for sales of U.S. software in Austria appear to be in the Internet systems engineering and applications consultancy, data bank and communications software/office automation,  security, education, CASE, CIM and quality control. The primary end-users are industry, financial services, public administration, trade, health, energy, production, distribution and electronic banking.

Resources

Your contact in our office: Ingeborg Doblinger

Drugs and Pharmaceuticals (DRG)

Drugs and Pharmaceuticals (DRG) 
Data Table (in $ million)

  2007 2008
(estimated) 		2009
(estimated) 
Total Market Size 3,664.9 3,915.2 4,114.6
Total Local Production 2,702.6 2,872.8 3,003.4
Total Exports 4,460.2 4,833.1 5,150.9
Total Imports 5,422.5 5,875.8 6,262.1
Imports from the U.S. 322.0 348.9 378.1
  • 2007 exchange rate: $1 = EUR 0.73
  • Source: Pharmig (Vienna, Austria), Statistik Austria
  • Note: The above statistics are unofficial estimates.

Overview

Given the present economic crisis, 2009 Austrian production of pharmaceuticals is expected to grow by only 3% while imports and exports will rise by approximately 5%.  An estimated annual real growth rate of 3% of total market size over the next 3 years seems realistic.  More than half of all pharmaceuticals approved for sale in Austria are imported.  The Austrian health-care system directly employs approximately 170,000 people.  Another 180,000 are indirectly engaged in the industry.

Pharmaceutical expenditures in Austria account for about 13% of total health care spending.  Around 70% of health-care spending is publicly financed. International comparison shows that drug consumption in Austria is significantly below the European average with regard both to expenditures in Euros and to the number of packages sold.  Annual per capita consumption amounts to 22 packages valued at approximately $250.  Self-medication accounts for about 10% of the market, placing Austria in the lower third among other European countries.  Increased life expectancy and the growth in private health care insurance are expected to have a positive impact on the market.

European drug prices are 25 to 35% lower than U.S. prices.  Europe spends 60% less per capita on pharmaceuticals than does the United States – a gap that has roughly doubled since 1992, when European governments spent about 30% less per capita than the United States.

Austrian pharmacy sales prices for pharmaceuticals are about the European average, whereas factory prices are below the European average.  As of January 1, 2009, the Government of Austria reduced the Value Added Tax (VAT) on drugs and pharmaceuticals from 20% to 10% which has been a long-term claim by the U.S. Commercial Service Vienna, and the Association of Research-Based Pharmaceutical Companies (FOPI).

Suppliers of drugs to the Austrian population include 1,184 public pharmacies, 49 hospital pharmacies, and 992 self-dispensing doctors who receive their pharmaceutical products from public pharmacies who dispense medicine directly to patients.

The Austrian pharmaceutical industry consists of subsidiaries of multinational companies and small and medium-sized Austrian firms.  Both groups have enjoyed above average growth in sales in recent years.  Market leaders are Novartis, Glaxo Smith Kline, Baxter, Sanofi-Aventis, Roche, Janssen & Cilag Pharma, and Merck, Sharp & Dohme.

Products from the U.S. enjoy an excellent reputation with respect to quality and safety.  The Austrian market is very receptive to U.S. imports in this field; however, U.S. exporters may find significant bureaucratic hurdles.  U.S. imports of drugs and pharmaceuticals rank second only to Germany in volume, and they are ahead of France, the United Kingdom, and Switzerland.

Approval of Pharmaceutical Products

Access to the Austrian pharmaceutical market is subject to strict national and EU legislation.  The approving authority is the newly established “Austrian Federal Agency for Safety and Health Care” with its operational sub-unit “AGES Pharm Med.”  The authorization process consists of three different procedures:

  • Centralized Procedure (EU): Authorization through this procedure is immediately valid in all EU member countries and is compulsory for certain medicines, including genetically engineered medicines.
  • Mutual Recognition Procedure (EU): The requirement for authorization through this procedure is existing approval in another EU member country.  If the approval is already in place in one EU country, other EU countries can approve the drug using a simplified procedure.
  • National Procedure: A drug approved through this procedure may be sold only in the approving country.

Reimbursement of Pharmaceuticals

A pharmaceutical firm seeking to include a product on the list of reimbursable drugs without prior authorization must first obtain the approval of the umbrella organization of social insurance funds (Hauptverband der oesterreichischen Sozialversicherungstraeger / HVB).  Almost all new innovative pharmaceuticals must be individually approved by HVB physicians.  According to U.S. pharmaceutical companies, the HVB approval process (particularly the long delay in securing HVB decisions) limits market access for innovative pharmaceutical products.  The problem is compounded by other, relatively quick HVB approvals of generic competitor products even before patents for the innovative products have expired.  In 2007, the European Commission filed a suit against Austria for violating the EU’s Transparency Directive, challenging the transparency of the approval process, particularly the long delays in securing decisions.  As a result the approval process will be adjusted.   Industry estimates that the period between market authorization and actual market access averages nearly 400 days in Austria, the third longest period in the EU.

Best Products/Services

Best prospects among American-made pharmaceuticals are: cancer medications; cardiovascular medications; pharmaceuticals for psychotherapy; AIDS medications; bio-technologically produced medications; and vitamin and mineral combinations such as Melatonin, DHEA, and St. John’s Wort.  These are classified as pharmaceuticals in Austria, not as dietary supplements as they are in the U.S.

Opportunities

No information on special projects or opportunities is currently available.

Web Resources

Your contact person in this office is Manfred Weinschenk, Commercial Specialist

Medical Devices (MED) 

Medical Devices (MED)
Data Table (in $ million)

  2007 2008
(estimated) 		2009
(estimated) 
Total Market Size 884.6 884.8 936.5
Total Local Production 800.1 845.6 881.4
Total Exports 1,201.4 1,306.6 1,375.4
Total Imports 1,285.9 1,345.8 1,430.5
Imports from the U.S. 270.7 286.1 301.2

Overview

This brief report deals with market opportunities for medical devices in Austria, used in hospitals and doctors’ medical practices, and also for home healthcare. This market brief does not include dental devices as these products are discussed in a separate “best prospects” report.

In 2007, Austrian imports of medical equipment were $1,285.9 million. For 2008 we expect these imports to increase to $1,345.8 million. Total demand for medical devices in Austria added up to $884.6 million, while exports of this equipment amounted to $1,201.4 million. Austria is a transit-trade country with strong trade relationships with Central, Eastern and Southeastern Europe, as well as the Near and Middle East. Re-exporting products is quite common here; hence the volume of imports exceeds the total market. Taking into consideration these re-exports, imports are expected to increase at an average annual real growth rate of 3 to 4%. Despite the present economic crisis, the size of the market in Austria for medical equipment should still increase about 1 to 2% annually over the next three years.

Presently, Austria provides its citizens with free or nearly free medical service. Participation in public health insurance programs is essentially mandatory. Some 5.9 million Austrians contribute to the public health insurance companies (Krankenkassen), providing health care coverage for these workers and their families, or about 8 million persons. Insurance costs are shared between employers and employees. Insurance for hospital treatment, however, falls short of the actual costs, and the difference has to be met from public funds.

Approximately 2.7 million Austrians pay premiums into private supplementary insurance, in addition to their social security contributions. For these premiums, the insured person is given better accommodation in the hospital (a single room, for example). And the costs of treatment by a doctor of choice are covered. This can mean shorter waiting periods for examinations. Private insurance also covers the cost of treatment in the private surgery of the practicing doctor, as well as any prosthetic materials and pharmaceuticals which are not fully covered by the contract with the social health insurance program, e.g. those for special dental services. The premiums for private health insurance are calculated according to actuarial principles and are partly income tax-deductible.

Best Products / Services

The average Austrian still expects hospitals to have the latest technology. Thus, U.S.-made products that are on the cutting-edge will still have great potential. But the trend is to reduce the number of hospital beds and to close down some hospitals altogether. So American companies that are interested in hospital construction or in the sale of “routine” hospital equipment and supplies may find their prospects reduced over the next few years.

Projected growth rates for different imaging products vary considerably. The Austrian market for medical equipment is constantly evolving and utilizing increasingly sophisticated products.

Scanning units have benefited from technological improvements since their introduction about 30 years ago. Most suppliers now offer user-friendly features like image networking, which enable the user to digitally store and project high quality images. Those products should have quite good prospects in the future. Austria is an interesting market for echography units. This ultrasound technique continues to become more popular as the industry discovers new applications for it. Recent technological advances have enabled manufacturers to implement Doppler technology and sophisticated probes within their designs.

Sales of conventional radiology apparatus, which has traditionally been the most popular type of equipment, have declined over the last several years. The recent ability to digitalize this out-dated equipment, however, has sparked new interest in traditional radiology. Interventionism radiology is the most recent development in the medical imagery field. A combination of radiology and surgery, interventionism radiology has resulted from advances in vascular radiology, digitalization techniques, and catheter performance. It promises to have a strong future.

Taking into consideration the above information, as well as feedback from medical industry experts, the following products are considered to have the best sales prospects:

  • Diagnostic imaging equipment, especially ultrasonic diagnostic equipment
  • Patient monitoring systems including intensive care units
  • Endoscopic instruments and equipment
  • Dialysis equipment
  • Pacemakers
  • Implantable devices
  • Highly sophisticated clinical laboratory equipment
  • Nuclear medical instruments
  • Clinical laboratory equipment
  • Sophisticated surgical disposables
  • Tele-Radiology Equipment
  • OTC products such as blood pressure, diabetes and electronic fever measuring instruments and other small electronic devices

Opportunities

All major hospital projects planned for Vienna and the Austrian provinces have been completed.  With the expansion of the city of Vienna across the Danube River, a new tender was published for a hospital project called “Krankenhaus Nord”, for a total cost of $616 million. The hospital is expected to have 850 beds and should be completed by 2012.

In some hospitals, replacement of obsolete equipment is an ongoing process.  In January 2009, the Government of the city of Vienna announced a new investment program in order to modernize and renovate public hospitals. The main reason for this initiative is to fight against the present economic crisis.  An increasing number of hospital projects in the Central and Eastern European countries of Hungary, Czech Republic, Slovakia, Romania, and Bulgaria are to be constructed by Austrian companies.  These projects will result in many opportunities for American companies to penetrate these markets as suppliers or subcontractors, or in partnership with Austrian firms active in the region. Furthermore, some Austrian design and construction companies are involved in hospital projects in Middle Eastern and Asian countries, including Saudi Arabia, Kuwait, and Indonesia.

U.S. manufacturers interested in marketing their medical equipment in Austria could considerably improve their market position by aggressive marketing, and by taking advantage of the following:

  • Long-established Austrian agents and dealers who have excellent contacts with purchasing managers and with the administrative directors of hospitals.
  • Products manufactured by U.S. subsidiaries in Germany (which are in conformity with EU-standards and include product information in the German language, etc.), as these products can normally be sold directly in Austria, and vice-versa.
  • The absence of broad domestic production in the majority of product categories in electro medical equipment.
  • The high quality the U.S. manufacturer is able to offer, at competitive prices. In general, prices of German electro-medical products are 15 to 20% higher than comparable U.S. products.

In the past, some U.S. subsidiaries have had significant problems in this market, which has been dominated for several decades by German manufacturers who offer great incentives to decision makers and purchasing officers. Unfortunately, hospitals owned by Austria’s provincial governments or cities have sometimes published tenders clearly specifying German equipment, which has created unfair competition. Advocacy efforts by the U.S. Embassy on behalf of U.S. manufacturers have improved the bidding environment.

Resources

Web Resources

www.bmgfj.gv.at                                                                                                               Bundesministerium fuer Gesundheit, Familien und Jugend
(Federal Ministry for Health, Families and Youth)

www.sozialversicherung.at                                                                                                  Hauptverband der oesterreichischen Sozialversicherungstraeger
(Association of Austrian Sick Funds)

www.oebig.at                                                                                                                    Oesterreichisches Bundesinstitut fuer Gesundheitswesen
(Austrian Federal Institute for Health)

www.fgoe.org                                                                                                                                 Fonds “Gesundes Oesterreich”
(Foundation “Healthy Austria”)                            

www.wko.at                                                                                                                            Wirtschaftskammer Oesterreich
(Austrian Federal Economic Chamber)

www.aek.or.at                                                                                                                                           Oesterreichische Aerztekammer
(Austrian Physicians' Chamber)

www.ameso.at                                                                                                                            Austrian Medical Society

www.oegam.at                                                                                                                     Oesterreichische Gesellschaft fuer Allgemein- und Familienmedizin  
(Member of World Organization of Family Doctors)

www.tuev.at/medizin                                                                                                                                 TUEV TUeV Oesterreich
(Austrian testing & certification institution)

www.medizinprodukte.at                                                                                             Oesterreichisches Medizinprodukte Handbuch – Goeschl Publishing House
(Austrian Medical Products Handbook)

Contact

Manfred Weinschenk, Senior Commercial Specialist

Aircraft and Parts (AIR)

Aircraft and Parts (AIR)
Data Table (in $ million)

  2007 2008
(estimated) 		2009
(estimated) 
Total Market Size 823.0 866.4 905.0
Total Local Production 72.3 63.1 61.5
Total Exports 1.096.0 1,172.7 1,231.3
Total Imports 1,846.7 1,976.0 2,074.8
Imports from the U.S. 701.5 750.6 788.1
  • 2007 exchange rate: $1 = EUR 0.73
  • 2008 exchange rate: $1= EUR 0.68
  • Source: Statistik Austria
  • Note: The above statistics are unofficial estimates.

Overview

The Austrian market for civil aviation aircraft amounted to $823 million in 2007 and was expected to grow by 7% in 2008, while Austrian aircraft and parts imports in 2007 amounted to $1.85 billion. With domestic-based manufacturing limited to one company, Diamond Aircraft Industries, the vast majority of the market is served by imports.

The major aircraft industry suppliers to Austria in 2007 were Germany with 47.5%, the United States with 38.0%, Canada with 4.5% and France with 2.7%.

The Austrian general aviation market is characterized by imports. Diamond Aircraft Industries is the sole Austrian manufacturer, and it produces only motor gliders. The Federal Statistical Office gives only import/export figures for civil aircraft and related parts and equipment. No official civil aircraft production figures are available. Production figures and market demand estimates are based on sales figures obtained from the Civil Aviation Office and Diamond Aircraft Industries.

Diamond Aircraft Industries, in Wiener Neustadt, rolled out 237 single-engine two-seater and four-seater propeller-driven avgas aircraft in 2007. 95% of Diamond’s production is exported.  In 2007, Diamond rolled out 28% more aircraft than in 2006. Diamond uses diesel engines from the German firm Thielert Aircraft Engines and avionics from the United States.

We project an average annual growth rate of 7% for the Austrian aircraft market. Growth rates are problematic because of the critical importance of government and military contracts and the possibility of large, one-time orders that greatly skew the statistics.

Aircraft leasing companies have become major factors in the industry as aircraft development and production costs escalate. For the airlines, leased aircraft offer the advantages of low capital investment and greater flexibility in adjusting to changing market conditions.

In line with the dimensioning of the fleet, the Austrian Airlines Group (AAG) leased two A340-300 aircraft to the Swiss in 2007. One Boeing 777-200 was included in the fleet. Moreover, the AAG is going to add two Fokker 100 planes to its operation and will drop four Airbus A330-200 models out of production.

Austria imported 8 twin-engine aircraft up to 14 tons and 5 aircraft in the 14-20 ton range in 2007. Imports of aircraft over 20 tons increased by 6 units in 2007 vis-à-vis 2006.

The principal end-users of civil aviation aircraft, parts and equipment are in the Austrian Airlines Group, which includes Austrian Airlines, Lauda Air, Tyrolean Airways and Rheintalflug, as well as other charter airlines. Emergency medical services and the police use civilian helicopters. The market for corporate fleets and business charter operators appears saturated because of the low prices for flights available commercially.

In the very important category of single aircraft up to 2 tons, U.S. aircraft are dominant. A total of 607 units were registered in 2007.  In 2007, 8 light aircraft (2 to 5.7 tons) were registered in Austria. A total of 28 twin-engine aircraft (up to 5.7 tons) were imported in 2007. This segment had the highest import increase. Private Austrian pilots register their aircraft for business use to gain tax advantages. Other end-users are air taxi and charter services.

The outlook in 2009 for new light aircraft in the category up to 2 tons is rather dim due to a glut of used aircraft on the market. However, demand for new aircraft in the category up to 5.7 tons is expected to rise again in 2008/2009 as older equipment is replaced. The only reason for postponing the replacement of the older equipment could be the economic downturn, which may delay it for some time.

Hope for future expansion of the civil helicopter market is not optimistic, due to the small size of the Austrian market. Most new purchases simply will replace old equipment. The industry’s efforts now focus on emergency medical services, police and military. The market leader is Eurocopter, followed by Agusta Bell, Hughes, Robinson and Aerospatiale.

Best Products/Services

The best sales potential during the period 2009-2010 for U.S. aircraft and equipment is expected to be for satellite navigation systems and GPS, aircraft 5.7 – 14 tons, aircraft engines, parts of and upgrades for older equipment.

Opportunities

No special projects or specific opportunities are available at the present time.

Resources

Web resources:

www.austrocontrol.at                                                                                                              Austrocontrol
(Austrian Air Traffic Control Authority)

www.luftfahrt.or.at                                                                                                                       Austrian Federal Economic Chamber's Aviation Department

www.viennaairport.com                                                                                                                 Vienna International Airport

www.aci-europe.org                                                                                                                                     Airport Council International

www.bmvit.gv.at                                                                                                                                Federal Ministry of Transportation, Innovation and Technology:
Civil Aviation Airport Authority

www.aua.com                                                                                                                                         Austrian Airlines Group

www.diamond-air.at                                                                                                                   Diamond Aircraft Industries

Contact

Ingeborg Doblinger, Commercial Specialist

Computers and Peripherals (CPT)

Computers and Peripherals (CPT)
Data Table (in $ million)

  2007 2008
(estimated) 		2009
(estimated) 
Total Market Size 2,917.7 3,021.1 3,145.7
Total Local Production 68.1 71.8 75.7
Total Exports 770.0 797.0 807.4
Total Imports 3,619.6 3,746.3 3,877.4
Imports from the U.S. 249.6 258.3 267.3
  • 2007 exchange rate: $1 = EUR 0.73
  • 2008 exchange rate: $1= EUR 0.68
  • Source: IDC Austria
  • Note: The above statistics are unofficial estimates.

Overview

The Austrian computer hardware market in 2007 totaled $2.9 billion, an increase of 7.6% vis-a-vis 2006. Hardware accounted for 33.5% of total IT spending in 2007.

Industry experts project that the IT market will expand 3.5% year-on-year in 2008 to reach $9.08 billion. Over the five year forecast period, the Austrian IT market should expand at a compound annual growth rate (CAGR) of 3.5% with the strongest growth to be seen in the hardware segment.

Sales for the entire computer hardware sector are expected to increase by 3.5% in 2008.

Office PC users use network and communications applications including e-mail capabilities, the Internet and Intranets. Notebook computers have become more important, enabling traveling employees to maintain communications with the home office. Users of office PCs tend to buy from a value-added reseller who offers a tailored “solution” to a particular data processing need or they purchase their PC desktop or notebook computer online.

Server sales reached $312.3 million in 2007, PC desktops sales reached $1.3million, and PC notebooks sales amounted to $1,067.7 million and storage system sales were $190.9 million.  Peripheral sales totaled $680.8 million and networking equipment sales reached $696.5 million. Hardware accounted for 33.5% of the total IT market in 2007. For 2008 the highest growth rates are forecast for mid-sized systems (25.8%) and networking equipment (4.1%). Peripheral sales will increase by approximately 10.5% in 2008. 

The hardware life cycle may also inhibit the market. Hardware acquired between 1999 and 2001 is now being replaced. Often, the costs of acquiring hardware devour budgets earmarked for projects in the services and software area.

On the consumer side, the focus clearly shifted to notebooks, as lower prices continue to attract more and more individual users. Consumer notebook sales in 2007 recorded strong growth.

The Austrian disk systems market is highly competitive with a relatively low volume of annual array sales. At $181.2 million in end-user spending, Austria accounted for just 2.7% of 2007 disk storage systems spending in Western Europe. The $181.2 million in disk systems revenue represented a 1.3% growth over the previous year.

New shipments of disk storage systems grew at a healthy pace of 53.9% in 2007. Austria’s growth in this sub-sector contributed approximately 2.5% of total incremental shipments of storage systems throughout Western Europe. Storage spending was also driven by projects intended to increase data resiliency and to reduce data recovery and restore times. Such trends would certainly support the shift towards networked storage.

A large portion of recent storage spending was in the financial services, telecom services, government, and healthcare industries.

The top three suppliers accounted for 57.5% of total 2007 array sales, and the top ten suppliers exceed 80% of total market value.

Blades will remain the engine of growth for x86 servers, primarily for the datacenters. Cloud computing will become an important IT technique to reduce capex while containing opex associated with IT staff costs. Datacenters where hosting is occurring will gain much of the new-generation infrastructure. Other challenges will be around power cooling, which will be a top priority for many customers in 2009. Virtualization and multi-core technologies will increasingly be combined as x86 server platforms take on increasingly heavy enterprise workloads.

The United States is the main source of imports, followed by Germany. Overall, sales for the entire computer hardware sector are expected to increase by 3.5% in 2008.

Best Products/Services

The best opportunities of sales for U.S. manufactured IT hardware products are disk storage systems, servers (x86), peripherals, networking equipment, smart handheld devices and notebooks with special features. 

Opportunities

Infrastructure projects in the public and private sectors may create increased demand for computer hardware products.

Resources

www.adv.at                                         ADV – EDP Association 

www.ocg.at                                         Austrian Computer Society

www.computer-buerosysteme.at        Vienna Chamber of Commerce – Dept. ICT

www.arcs.ac.at                                    Austrian Research Center Seibersdorf

www.viw.at                                          Informaton Industry Association

Contact

Ingeborg Doblinger, Commercial Specialist  

Dental Equipment (DNT) 

Dental Equipment (DNT)
Data Table (in $ million)

  2007 2008
(estimated) 		2009
(estimated) 
Total Market Size 97.2 102.4 104.1
Total Local Production 180.8 188.5 193.3
Total Exports 171.4 178.6 185.0
Total Imports 87.8 92.5 95.8
Imports from the U.S. 6.3 6.6 6.9
  • 2007 exchange rate: $1 = EUR 0.73
  • 2008 exchange rate: $1= EUR 0.68
  • Source: Statistik Austria
  • Note: The above statistics are unofficial estimates.

Overview

The market for U.S. dental products in Austria includes dental hand instruments, electro-dental apparatus such as electrical dental drills, dental workstations including lighting, x-ray equipment for dental use, anesthetic equipment, computerized systems for dental documentation, and equipment and instruments for dental technical laboratories. The market brief also covers the market for dental drill parts, burrs, discs, and brushes, dental filling material, artificial teeth, and other dental prostheses and implants, as well as spare parts for the above mentioned electro-dental equipment.

Austria has approximately 4,550 active dentists whose dental practices offer a high standard of care comparable to that of the United States. Basic dental services are generally paid for from the national social security system for most citizens. Patients are charged for such additional services as dental prostheses, implants, and artificial teeth. The 670 dental technical laboratories operating in Austria employ approximately 2,500 dental technicians.

For 2007, the total Austrian market for dental products and equipment amounted to $97.2 million. Total imports were $87.8 million, exports were $171.4 million, and domestic production of dental products and equipment was an estimated $180.8 million. This local production consisted of electro-dental apparatus (one third) and dental prostheses, implants, and artificial teeth (the remaining two thirds). Given the present economic crisis, the market is still expected to grow at an estimated annual real growth rate of 1% – 2% over the next three years.

Austrian imports from the United States were $6.3 million in 2007, representing 7.2% of total imports. Germany supplied 40.6% of Austria’s imports of dental products and equipment in 2007, followed by Switzerland with 29.2%. The United States ranked third as a supplier country for dental products and equipment.

U.S.-manufactured dental products enjoy an excellent reputation in Austria for their state-of-the-art technology. Only high quality products will find good opportunities in the Austrian market. Quality, reliability, service, and timely delivery are crucial factors for selling in this market. Availability of technical assistance and service support are essential if U.S. companies expect to succeed in the Austrian market.

Best Products / Services

The average Austrian expects dental offices and clinics to have the latest technology. Thus, U.S.-made products that are on the cutting edge of modern dentistry will have excellent potential. High product quality and reliability, good service, and timely delivery are crucial factors for selling in the sophisticated Austrian market.

Taking these factors into consideration, and based also on specific feedback from dental industry experts, we have compiled the following list of products with the best sales prospects:

  • Dental Units
  • Dental Drill Motors and High-Speed Dental Drills
  • Dental Hand Instruments
  • Dental X-Ray Machines
  • Medical Masks
  • Dental Composites
  • Dental Ceramics
  • Dental Implants

Opportunities

Future Austrian demand in this industry, especially for electro-dental products, will grow more slowly than it has in recent years for the following reasons:

  • The big generational change in physicians’ equipment in dental practices in Austria is complete. The majority of dental practices are now largely equipped with modern dental equipment.
  • Under governmental pressure to lower health costs in Austria, the health insurance companies and hospitals have been cutting costs and reducing expenses, thanks to more efficient cost management. These measures will have an impact on purchasing policies for dental equipment in all major dental clinics at Austrian hospitals.

A positive factor influencing market demand for dental products is higher life expectancy. In Austria, the average life expectancy has increased from 62 years for men and 68 years for women in the 1950s, to 75.5 years for men and 81.5 years for women today. This increased average lifespan, and a pronounced decrease in births over the last three decades, has altered demographic patterns in the Austrian population. The population is aging, as it is in most developed nations. The life expectancy should rise to 79 years for men and 85 years for women by the year 2030. These trends have created new niche markets, including an increasing demand for dental products.

There are no special projects or specific opportunities available at the present time.

Web Resources

Contact

Manfred Weinschenk, Senior Commercial Specialist

Audiovisual Equipment (AV)

Audiovisual Equipment (AV)
Data Table (in $ million)

  2007 2008
(estimated) 		2009
(estimated) 
Total Market Size 1,642 1,913 2,105
Total Local Production 423 465 512
Total Exports 927 1,020 1,122
Total Imports 2,146 2,468 2,715
Imports from the U.S. 169 183 198
  • 2007 exchange rate: $1 = EUR 0.73
  • 2008 exchange rate: $1= EUR 0.68
  • Source: Statistik Austria, FEEI, Federal Economic Chamber
  • Note: The above statistics are unofficial estimates.

Overview

The Austrian population is 8.3 million with 3.5 million households. In 2007 there were a total of 3.4 million TV households and 2.7 million DVD households registered. Consumer spending on video was $2.3 billion. Free-to Air TV is very popular: a very large number of German language channels are available for free on digital and analogue satellite and cable T. At the end of June 2008, a total of 92% of TV households received TV by satellite (50%) or cable (42%). Terrestrial TV offers six Austrian channels that are broadcasted nationwide or nearly nationwide.

The Austrian broadcasters have to prove themselves in a highly competitive market, where all important German channels are available to cable- or satellite households. The public service broadcaster ORF (Austrian Broadcasting Corporation) is dominant in the TV market. The two channels ORF 1 and ORF 2 had an average market share of combined 43.1% in 2007 leading the ranking list by far. The German channel SAT.1 followed in 2007 with an average market share of 6.8%.

There are four Austrian-originated commercial TV broadcasters: ATV, Puls 4, Austria 9 and gotv. As all of them are quite new in the market, their market shares are still marginal. ATV started in 2003 as Austria’s first commercial broadcaster and is the most successful within this group with an average market share of only 2.7% in 2007.

ATV and Puls 4 can be received nationwide via satellite, cable and antenna. Austria 9 and the special interest channel gotv (music) can be received by digital satellite or via cable. Another special channel named ORF sportplus is an additional offer of ORF and dedicated to sports and travel programs. It is broadcasted for satellite, cable- and antenna reception.

Several regional TV broadcasters produce one or two hour programs, which are updated daily or weekly and are constantly repeated.  Premiere Austria is the only pay TV operator and is a local version of Premiere Germany. It had approximately 2.4 million subscribers in Germany and Austria by the end of 2007. The number of Austrian subscribers is not available. The operator has key movie Pay TV rights and also offers the Austrian Soccer League.

In June 2008 mobile TV was launched on the basis of the digital broadcast-standard DVB-H for handheld devices. Over 50% of the Austrian population has access to this technology with 15 Austrian and German channels offered of which four are especially designed for mobile. In addition, four radio programs are transmitted.

The import of audio  and infrastructure equipment  in 2007amounted to $1.16 billion, an increase of 33.5% vis-à-vis 2006, while the import of conferencing and home cinema equipment  including TV sets valued $981.12 million in 2007, an increase of 39.4% over 2006. The import of security systems in 2007 amounted $219.1 million.

Demand for audio and infrastructure equipment was increasing in 2008 according to industry experts, while demand for conferencing and home cinema equipment including LCD or Plasma TV sets will continue to increase at a double digit rate. There will also be significant growth for security equipment, since emphasis has been placed in Austria on homeland security and critical infrastructure protection.  The greatest potential can be realized in the retail and public sectors. Additional growth possibilities exist for residential alarms and video cameras, ICT security (firewall, anti-virus, Spam filters) and protection systems.

Best Products / Services

Titles that benefited from strong marketing support and promotions during the previous release windows continue to be top titles in VOD, which remains a hit driven market.  Free content helps to grow numbers of orders, but on demand usage is increasing on a transactional basis as well.

Households are prepared to pay more for quality equipment. The consumer electronics entertainment segment of the AV market including HIFI stereo equipment, TV sets (digital-ready and HDTV compatible sets) is the fastest growing segment. Products of high demand include home entertainment systems, LCD and Plasma TVs, DVD players/recorders, Digital Portable Audio Players (mp3).  The demand for LCD projectors for home cinema is also increasing.

Businesses are looking increasingly at DLP technology and for large displays. LED rather than plasma is in demand. In addition, they are looking for integration services such as image projection and manipulation related software and audio integration solutions. Popular AV products in the conference room and public stations (e.g. subway stations), include electronic display systems, control systems and beamers. Demand for wireless, portable products is growing, as well as for alarm systems and video cameras for residential and business purposes.

Opportunities

Opportunities for audio visual equipment exist at public facilities, for instance train stations, hospitals, medical offices, day spas and clinics, and more.

Web Resources

Contact

Ingeborg Doblinger, Commercial Specialist

Electrical Power Systems (ELP) 

Overview

Austrian electric power generation and distribution systems are among the most reliable and environmentally friendly in Europe.  Though dependence on foreign electricity is a matter of concern for policy makers, the relatively high cost associated with local power generation (in accordance with environmental concerns and regulations) has brought a continuous shift to foreign-sourced electricity.

The market for electric power is characterized by increasing consumption, stable production levels, and increasing imports.  In 2007, total electricity consumption rose to 70,903 GWh, up slightly from 70,778 in 2006. At the same time, production has ranged between a low of 34,000 GWh (2006) and 36,000 GWh (2004), reaching 34,900 GWh in 2007.

The most important source of Austrian electric energy is water: there are 627 run-of-river plants, 101 pumped storage plants, and 1,777 non-allocated hydro power plants located in Austria.  Together, these facilities account for around 60% of locally produced electricity. The second most important source of electricity is fossil-fueled power plants: there are 615 thermal plants currently on line, generating around 36% of the local production volume.  Most of the thermal plants are either gas or coal fired, though a respectable minority (around 15%) is run on biogenic fuels.  The remaining 4% are a mix of wind, solar, and other alternative energy sources.  Nuclear power generation is unconstitutional in Austria.

The Austrian grid network is composed of overhead and underground elements, whereby the overhead lines predominate with 95% of the transmission route and 96% of the system length.  The transmission route has a total length of 9,794 kilometers, split into 110, 220 and 380kv lines.  The system length is 17,334 kilometers.

Best Products / Services

The most interesting business opportunities for U.S. companies at this time are in alternative energy projects, power storage projects, and the completion of the high voltage network.  Investments upwards of 7 billion Euros ($11 billion) in alternative energy projects are planned for the time period between 2008 and 2015.  Wind and small hydro are seen as the most promising technologies, and benefit most from the government’s financial incentive programs.  The last 171 kilometers of the 380 kV high-voltage circuit (total length: 1,800 km) is scheduled to be completed in 2010, a necessary prerequisite for the storage of power from alternative energy sources.

Opportunities

In addition to the plans to complete the high-voltage circuit and the planned investment by utilities in alternative energy projects, both mentioned above, there are several projects currently in planning for power generation and storage. For a current listing of projects in this sector, please see page 53 of our "2009 Country Commercial Guide: Doing Business in Austria".

Web Resources

Contact

Marta Haustein, Commercial Specialist

Oil and Gas Field Equipment (OGM)

Overview

Natural gas is an essential element of Austria’s energy economy, providing 22% of Austrian energy consumption.  In addition, Austria plays a significant role in the European gas network, acting as a hub for the distribution of Russian gas to other European countries.  Gas consumption has been rising slowly, with dips and peaks caused by variations in weather patterns and economic activity.  The average yearly gas consumption in Austria is around 8 bcm, of which around 50% comes from Russia, 30% from Norway and other countries, and around 20% from local sources.  Usage is split between industry (37%), power generation (34%), households/agriculture (19%), and transportation/other uses (10%).  It is estimated that one in four homes heats with gas.  The national gas pipeline network is around 38,000 kilometers long (around 23,600 miles).  Transit lines add another 1,400 kilometers (670 miles).  Austria has storage capacity of around 1.9 bcm, held at five different locations.

Austria’s most important gas/oil company is OMV, a regional player with operations in 22 countries, including significant investments throughout Central and Eastern Europe.  OMV operates the (physical) international gas hub at Baumgarten near the Slovak border, as well as the Central European Gas Hub (CEGH), a web-based trading platform offering commercial, logistical, and auctioneering services to gas traders.  Its 100% subsidiary Austrian Gas Grid Management AG manages the Austrian pipeline network.  OMV plans to sell shares in the CEGH to the Vienna Stock Exchange as well as two Gazprom subsidiaries, pending approval by Austrian and European regulators.  OMV also plays an important role in the Nabucco gas pipeline company.

Best Products / Services

The most interesting business opportunities for U.S. companies at this time are in boosting Austria’s natural gas storage capacity, as well as adding compressor stations and capacity to the existing pipeline network.  Opportunities are also likely to arise from pipeline projects currently in planning, most notably the Nabucco pipeline project, which would give EU countries access to gas resources in Azerbaijan and Turkmenistan through a pipeline that passes through Turkey, Bulgaria, Romania, Hungary to the Austrian Baumgarten station.  OMV is a leading player in the consortium surrounding the Nabucco project.

Opportunities

OMV plans to double its gas storage capacity from 1.8 bcm to almost 4 bcm.  OMV currently operates three smaller gas reservoirs in the east of Austria; the construction of a large fourth one near Gaenserndorf (east of Vienna) is planned to start in 2009 and will be completed in stages between 2012 and 2015.  OMV says that the new storage is necessary both to increase supply security and to cope with growing gas deliveries and peak demand situations involving the large gas hub at Baumgarten (near the Slovak border).  OMV is also planning to add compressor stations and parallel lines to the West-Austria-Gas pipeline (WAG); this ongoing project is scheduled for completion in 2011.  In addition to the OMV projects above, several extension and upgrade projects are in planning. For an up-to-date listing of these projects, please see page 61 of our "2009 Country Commercial Guide: Doing Business in Austria".

Web Resources

Contact

Marta Haustein, Commercial Specialist