One-off Effect Weighed on GDP in the Second Quarter – Leading Indicators Have Brightened Significantly

Following six consecutive quarters of growth, Austria's economic output contracted by 0.1 percent quarter-on-quarter in the second quarter of 2026. The decline was largely of a statistical nature: while gross value added expanded, a sharp rise in subsidies on products, coupled with a simultaneous fall in taxes on products, weighed on GDP. On the supply side, weakness in the construction sector persisted, while industry grew moderately. On the demand side, investment in machinery and equipment supported GDP. Employment stagnated in the second quarter and the unemployment rate remained in August at its highest level since mid-2021. Key leading indicators have recently improved significantly, driven by a broad, internationally observable recovery in industrial activity. The inflation rate picked up again in August due to higher energy prices, but, as in July, remained below the euro area average.