Austria is a dynamic EU member country with an affluent population of 8.3 million German speakers. Austria’s manageable size and stable business environment make it an attractive market for U.S. exporters, as well as an attractive test market for U.S. firms with an eye toward expansion into neighboring Germany. Austria’s historical and economic ties to the growth markets of Eastern and Southeastern Europe also make it a logical base for serving those markets. At present, approximately 340 U.S. firms have subsidiaries, affiliates, franchisees, and licensees in Austria, of which about 150 have regional responsibilities for Central European, Eastern European, or Balkan countries. U.S. products and services enjoy a good reputation in Austria.
This report deals with market opportunities for U.S. dental products in Austria. These products include 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 report 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 4,690 active dentists whose dental practices offer a high standard of care that is comparable to care in the United States. Basic dental services are generally paid for from the national social health system available for most citizens. Patients are charged for such additional services as dental prostheses, implants, and artificial teeth. The 667 dental technical laboratories operating in Austria employ approximately 2,500 dental technicians.
For 2009, the total Austrian market for dental products and equipment amounted to $126.1 million, with total imports of $94.3 million. Local production consisted of electro-dental apparatus (one third) and dental prostheses, implants, and artificial teeth (the remaining two thirds). The market is 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 $9.2 million in 2009, representing 9.8% of total imports. Germany supplied 47.6% of Austria’s imports of dental products and equipment in 2009, followed by Switzerland with 22.3%. 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.
The 2009 total Austrian market demand for dental devices amounted to $126.1 million and is estimated to reach $130.9 million in 2010 and $132.2 million in 2011. The size of the Austrian dental market is expected to grow by about 1% – 2% annually over the next three years.
Nevertheless, 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.
Austria is currently at the end of a phase of strong population growth. Since the mid-eighties the population has grown by half a million inhabitants to the current level of 8.3 million, primarily because of an unexpectedly high rate of immigration. This dramatic rise in the immigrant population stabilized after 1996. Austria’s population is only expected to grow slightly in the coming decades. The Central Austrian Statistics Office estimates that in the year 2020 about 8.4 million people will be living in Austria, a 4.3% increase from 1994. After 2020, the population is expected to drop because of decreasing birth rates. One of the major social and political challenges for those responsible for Austria’s health infrastructure in the next few years is the above-average increase in the number of very old and frail people. There are currently ca. 670,000 people over 75 years of age. This figure will exceed 925,000 by the year 2025, a growth rate of 38%. Today 20% of Austrians have already reached retirement age, and by the year 2025, 25% will be retired. Meanwhile the broad age group of people between 15 and 59 years has begun to decrease since the year 2006.
Most Austrians are covered by a national health insurance plan. Participation in public health insurance programs is essentially mandatory. Some 5.1 million Austrian workers contribute to the public health insurance companies (Krankenkassen), providing health care coverage for themselves and their families, a total of about 8 million persons. Insurance costs are shared between employers and employees. Insurance for hospital treatment, however, falls short of actual costs, and the difference has to be met from public funds. Although very basic dental services are usually covered by the public health insurance companies, patients are charged for all additional services and for dental prostheses, implants, and artificial teeth. Because of the relatively high prices for all additional dental services in Austria, a kind of “dental tourism” has developed, especially in the eastern provinces. Patients travel to Hungary to get additional dental services for about 30% or 40% less expenditure, mainly because of lower labor costs.