30.01.2024

Weak Momentum at the Beginning of the Year

Results of the WIFO-Konjunkturtest (Business Cycle Survey) of January 2024

The results of the WIFO-Konjunkturtest continue to show a weak trend in business assessments of the economy in January. At –6.8 points (seasonally adjusted), the WIFO Business Climate Index was 0.6 points below the previous month's value (–6.2 points) and thus remains in pessimistic territory. Situation assessments deteriorated slightly compared to the previous month. Economic expectations also deteriorated slightly compared to the previous month and continue to signal a cautious economic outlook. The sceptical economic picture continues to be determined by the very weak industrial and construction sectors. Accordingly, business uncertainty – measured in terms of the ability to assess their own future business situation – remained above average in January.

The index of current situation assessments for the economy as a whole fell by 0.4 points in January and remained in negative territory at –5.5 points. In manufacturing, which is particularly important for the economy, the situation index gained 2.2 points, but at –20.7 points was still noticeably below the zero line that separates positive from negative situation assessments. In the construction industry, the situation index rose (+3.6 points), but remained in negative territory at –2.8 points. In the services sector, on the other hand, the situation index lost some momentum again (–2.4 points), but remained in positive territory with a value of 2.6 points. The situation index also lost ground in the retail sector (–2.5 points) and, at –3.3 points, was once again somewhat more clearly below the zero line.

The index of business expectations for the economy as a whole lost 1.0 point in January and, at –8.3 points, was below the zero line that separates negative from positive economic expectations. In the retail sector, the expectations index gained 2.9 points compared to the previous month, but at –17.1 points remained low in the area of sceptical economic expectations. In the services sector, on the other hand, the expectations index fell (–3.7 points) and was back in negative territory at –2.2 points. In construction, there was a significant decline in expectations (–6.3 points). At 0.3, the index was only just above the zero line, with production and employment expectations in particular deteriorating further. There was an improvement in the expectations index for manufacturing in January (+4.0 points). However, at –18.2 points, the index remained low in the area of pessimistic economic expectations.