Floods Caused 1.3 Billion € in Damage

Almost 700 companies severely affected by the floods

Direct losses were used to calculate the losses in the industrial sector. This includes, for example, the destruction of stocks or interruptions to company activities (e.g., as a result of clean-up work or destroyed machinery). In order to calculate the indirect impact of the floods on the regional economy, an input-output model adapted to natural disasters was selected.

Official reports speak of around 900 companies affected. According to the ASCII model, 841 companies were affected by the floods, 676 of them severely. While some of them certainly suffered devastating losses, the damage in relation to the total annual value added of the province of Lower Austria was limited at 0.03 to 0.09 percent. In figures, that is around 300 to 900 million €. The reference year is 2020.

Natural disasters always hit the agricultural sector particularly hard

Estimates by Austrian Hail Insurance, the specialist insurance company for farmers, put losses at 10 million €. However, this is not an exact representation of the losses, as a deductible is payable for crop failures and not all farmers are insured. In order to determine the total extent of the damage, geodata was used to identify the crops that were located in the affected fields. This applies in particular to cereals, corn and sugar beet. As a result, a maximum loss amount of 14.7 million € was calculated.

Record loss for private households

Data from the Austrian Insurance Association (VVÖ) was used for private households. This showed a record loss of 700 million € on the part of households.

Current compensation model needs reforming

"With this modelling, we can quickly localise economic damage more precisely and show where measures can be sensibly implemented," says ASCII Director Peter Klimek, summarising his institute's contribution to tackling natural disasters.

"Heavy rainfall and subsequent flooding, as occurred in Central Europe in September 2024, are extreme weather events. Due to climate change, these will occur more frequently, but above all, more intensely. Therefore, the development of methods for rapid assessment of the economic impacts is important. This also allows for the introduction of coordinated measures and the absorption of possible losses," says Klaus Friesenbichler, ASCII Deputy Director and WIFO economist.

Finally, a comparison with previous flood disasters shows that Austria was generally well prepared for possible flooding, which is why significant economic damage could be prevented. This is also due to the fact that around 60 million € are invested in flood protection in Austria every year. However, revisions could be made to the compensation model, which makes affected households and companies dependent on the disaster relief fund and provides few incentives not to build in high-risk zones.