In relation to its size and population, Luxembourg is one of the most highly industrialized countries in the world. Its standard of living rivals that of any country in Europe. Steelmaking, traditionally the most important industry, has seen its contribution to GDP decline from 21% in 1974 to 1.8% in 1996. Iron ore, formerly mined in limited quantities, is no longer produced because supplies have been exhausted. The country's lack of industrial fuels makes it completely dependent on imports of coke for steel production. In 2001, Luxembourg's steel producer, ARBED, merged with France's USINOR and Spain's ACERALA to create the world largest steel company, NewCo, in order to increase competitiveness. Other industries—plastics, rubber and chemicals and other light industries—have been successfully developed, and the service industries, most notably banking, have expanded rapidly. Services now contribute 69% to GDP (2000 estimate).
Agriculture is generally small-scale, with livestock and vineyards comprising the most important segment.
The worldwide recession of the early 1980s adversely affected Luxembourg's economy; between 1985 and 1992, however, GDP grew by 32%, or 4% per year. Growth for 1998 was 2.9%. Inflation, as high as 9.4% in 1982, was only 0.3% in 1986 and averaged 3.3% during 1988–92. Average inflation 1999 to 2001 was 2.3%. Total GDP, at $13.9 billion in 1998 (purchasing power parity) had risen over 38% to $19.2 billion by 2001. Per capita income in 2001 was $45,500, one of the highest in the world, with GDP growth reported at 8.3%.
Luxembourg is known for having one the lowest unemployment rates in Europe. The unemployment rate averaged just 1.4% between 1984 and 1991 and was 3% in 1998. In 2001, unemployment was at 2.7%.