Mercer's Quality of Living Survey (2017) revealed that Vienna was the most liveable city in the world for the eighth year in a row. The city is an economic powerhouse of the country, accounting for 35% of the national population and 37% of GDP in 2016. In fact, given its prominent location at the heart of Europe, Vienna is widely open to international organisations, foreign investors, entrepreneurs and tourists alike. In turn, Vienna is famous for its business-friendly environment.
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Vienna gains its economic strength from being a major centre of activities in the country, with a knowledge-based industrial composition and well-developed infrastructure. The great availability of highly skilled labour and scientific know-how reflects its above-average labour productivity (or GVA per employee) which came out 22% higher compared with the rest of the country in 2016.
However, the positive effect of higher labour productivity on household earnings in Vienna is offset by demographic factors. A lower labour force participation rate, along with a smaller average household size in the city, pull down per household disposable income, which was only 0.9% higher than in the rest of Austria in 2016.
Spending per household (excluding transport and housing) was 11% higher in Vienna than in the rest of the country in 2016. Vienna featured relatively high consumer spending on recreation and culture as well as hotels and restaurants in 2016. This came as little surprise considering Vienna was among the 10 most popular tourist destinations in Europe in terms of total number of international bed nights in 2016.
In terms of city affordability, Vienna is well placed in Austria. Expenditure on housing and transport per household was 17% lower in the city than elsewhere in the country in 2016. Low housing expenses play a particularly important role in reducing the cost of living in the city.