Economic Sentiment Remains Sceptical Despite Improvement

The results of the WIFO-Konjunkturtest (business cycle survey) show a slight rise in business confidence in May. However, sentiment remains largely sceptical due to the war in Iran. The WIFO Economic Climate Index stood at –4.8 points (seasonally adjusted), 1.0 points above the April figure. Whilst assessments of the current situation are improving, price effects and uncertainties surrounding the war in Iran are weighing on economic expectations. Despite the rise in the index, companies in the manufacturing and retail sectors in particular remain sceptical. In the construction sector, there are signs of improvement in both current conditions and expectations. Corporate demand for credit has declined slightly compared with the previous quarter. Banks' willingness to lend has improved slightly, though the majority of companies still regard it as restrictive.