Drastic Deterioration in Economic Forecasts

The index of current assessments of the overall economic situation declines by 37.1 points to the –28.2 mark in April (excluding seasonal fluctuations). This is the biggest slump ever recorded for this indicator and can be observed across all sectors. In the service sector, the index slumped by 42.7 points to the –34.3 mark, the lowest level since the beginning of the evaluations. In the construction industry, it drops by 49.7 points, but at –12.3 points is still well above its lowest value to date. In the manufacturing industry, the situation index loses 24.4 points and is also well into negative territory at –23.9 points.

The impact of the COVID-19 pandemic is also reflected in expectations. The index of business expectations crashes in April after the already significant slump of the previous month. At –32.6 points, this is the largest decline ever measured in a month-on-month comparison. At 36.2 points, the expectations index is at its historic low. The slump in the construction industry is less massive and deep (–18.1 points) compared to the other sectors, but the index is clearly in negative territory at –9.7 points. In the service sectors, the expectations index drops more significantly (–37.2 points) and at –37.6 points is well below the zero line that separates positive from negative expectations. In the manufacturing sector the expectations index also decreases significantly (–29.8 points) and at –42.3 points are at a level last reached in the financial market and economic crisis of 2008-09. Companies are expecting a broad-based and deep economic crash in Austria.

Details on all sectors in the current economic survey can be found here.