08.01.2024

Economy With Uneven Momentum at the End of the Year

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

The results of the WIFO-Konjunkturtest (business cycle survey) in December show a further stabilisation in the still sceptical overall economic assessments of Austrian companies. At –5.8 points (seasonally adjusted), the WIFO economic climate index was 1.2 points above the previous month's value (–7.0 points), but remained in the pessimistic range.

Situation assessments improved slightly compared to the previous month. Economic expectations deteriorated again slightly and continue to signal a sceptical economic outlook. The sceptical economic picture continues to be determined by the very weak industrial and construction sectors, while the mood among service providers is beginning to brighten.

The index of current situation assessments for the economy as a whole improved by 3.1 points in December compared to the previous month, but remained in negative territory at –5.0 points. In manufacturing, which is particularly sensitive to economic trends, the situation index lost 0.9 points and, at –22.9 points, remained well below the zero line that separates positive from negative situation assessments. In the construction industry, the situation index fell (–4.4 points) and, at –6.3 points, was below the zero line at levels last seen at the beginning of the COVID‑19 crisis. In the services sector, on the other hand, the index rose noticeably (+6.4 points) and, at 5.3 points, was back in positive territory for the first time since July. The situation index also rose in the retail sector (+5.2 points) and was only just below the zero line at –0.8 points.

The index of business expectations for the economy as a whole gained 1.5 points in November, but at –5.9 points was still below the zero line that separates negative from positive economic expectations. In the retail sector, the expectations index gained 0.6 points compared to the previous month, but remained deep in negative territory at –20.0 points. In the services sector, the expectations index rose by 1.8 points to 6.3 points above the zero line. The expectations index also rose in the construction industry (+3.8 points) and was back above the zero line at 4.4 points, although production and employment expectations remained negative. The expectations index for manufacturing showed a further deterioration in December (–4.1 points). At –21.5 points, the index was low in the range of pessimistic economic expectations.