28.07.2023

Economic Assessments Deteriorate Further

Results of the WIFO-Konjunkturtest (Business Cycle Survey) of July 2023

The results of the WIFO-Konjunkturtest (business cycle survey) in July show a continuation of the cooling down of business cycle assessments. The WIFO Business Climate Index stood at –5.1 points (seasonally adjusted), 4.2 points below the value of the previous month (–0.8 points). The situation assessments declined across the sectors – except for the retail trade – and were deep in negative territory, especially in the energy-intensive material goods sectors. Economic expectations also deteriorated further, signalling a sceptical economic outlook across sectors. In line with the economic trend, sales price expectations continued to decline.

The index of current business situation assessments for the overall economy declined further in July (–5.7 points) and was clearly lower and in negative territory at –1.9 points. In manufacturing, which is particularly sensitive to the economic situation, the situation index lost 2.2 points compared to the previous month and at –11.1 points was noticeably below the zero line separating positive from negative situation assessments. In the construction industry, the situation index fell by 9.6 points and was just below the zero line at –0.3 points. In the service sectors, too, the index lost considerable momentum compared to the previous month (–8.5 points), but remained in positive territory with a value of 2.9 points. Only in the retail trade sector the situation index gained (+2.4 points) and was just in positive territory at 0.5 points.

The index of business expectations for the overall economy lost 2.9 points in July and at –8.1 points was noticeably below the zero line that separates negative from positive economic expectations. In the retail trade sector, the expectations index lost 2.6 points compared to the previous month and continued to be deeply pessimistic at –22.9 points. In the service sectors, the expectations index fell by 3.2 points and was negative at –2.9 points. In the construction industry, the expectations index declined slightly (–0.2 points) and remained just in positive territory at 1.1 points. In manufacturing, the expectations index also deteriorated in July (–2.7 points). At –14.3 points, the index is now at a noticeably pessimistic level.