Economic Expectations Lose Momentum

WIFO-Konjunkturtest (Business Cycle Survey) of March 2022
The results of the WIFO-Konjunkturtest (business cycle survey) of March show an improvement in the mood of Austrian companies. At 17.8 points (seasonally adjusted), the WIFO Business Climate Index was 1.7 points above the value of the previous month (16.0 points). The increase is mainly due to the improved assessments of the situation in the service sectors, which is related to the lifting of many COVID-19 restriction measures. However, uncertainty increased with the Ukraine war. Especially in the manufacturing sector, economic expectations lost momentum.

The index of current assessments rose by 4.8 points in March and was clearly in the confident range at 20.2 points. This increase is mainly due to services, where the index improved by 11.2 points and was again clearly in the positive range at 21.9 points. On the other hand, there was a noticeable deterioration in retail trade (–8.6 points). The situation index was clearly negative at –12.2 points. In construction, the situation assessments declined slightly (–0.4 points), but the index was still very high in the confident range at 40.5 points. In the manufacturing sector the index remained almost unchanged from the previous month (+0.2 points) and was in positive territory at 21.5 points.

The index of business expectations (seasonally adjusted) lost momentum in March (–1.4 points), but at 15.3 points remained well above the zero line separating negative from positive economic expectations. In the retail sector the expectations index continued to decline (–3.1 points) and was in negative territory below the long-term average at –12.1 points. In the service sectors, on the other hand, the index remained almost unchanged (+0.2 points) and was in the growth range at 17.7 points. In the construction industry, too, the expectations index remained almost unchanged (+0.1) and at 40.2 points was still at an above-average level. However, the increase in input prices led to a weakening of business situation expectations. In the manufacturing sector there was a decline in the expectations index (–3.9 points), which can be attributed to the uncertainty resulting from the Ukraine war and the energy price crises. However, at 12.1 points, the index was still well above the zero line.


Results of the WIFO-Konjunkturtest (Business Cycle Survey) of March 2022
Finalization: March 2022
Project partner Austrian Institute of Economic Research, Economic and Social Science Computing Center
Contractor project: European Commission
Specialist publication: WIFO-Konjunkturtest
Dr. Werner Hölzl
Industrial, Innovation and International Economics