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Vorarlberg ranks second only to Vienna in industrialization, with more than half of its labour force engaged in industry and crafts. Its textile and clothing industries, as well as its output of hydroelectric power in the Ill and Bregenzer river valleys, constitute considerable percentages of Austria's national production for export. Watch and clock making and metal, chemical, and pharmaceutical industries also contribute to the economy. Industry is concentrated primarily in the Rhine and, to a lesser extent, the Ill river valleys. The principal towns are Bregenz (the capital), Dornbirn, Feldkirch, Bludenz, and Lustenau. Agriculture is dominated by grassland farming and cattle raising, particularly in the upper Ill Valley and the Bregenzer Forest area. Dairy farming is also extensive. Potatoes, corn (maize), wheat, and fruit are grown in the Rhine Valley, which also has some vineyards. Forestry is declining, but Vorarlberg's Alpine tourist trade is of increasing economic importance. The state's road and rail communications with foreign countries are far more extensive than those with Tirol and the rest of Austria.
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