Economic Report Vienna

Vienna's economy once again proved resilient in the first half of 2025, with real gross value added expanding by +0.8 percent, decoupling from Austria's continued stagnation (+0.1 percent). This structural advantage reflects Vienna's strong services orientation: while industry faltered, the public sector and wholesale and retail trade provided the key growth impulses. Labour-market resilience is also evident, with employment increasing by +1.2 percent in the first half of 2025. Nevertheless, the unemployment rate also rose (to 11.8 percent) as labor supply grew even more faster. Rising risks cloud the outlook. Business sentiment in Vienna's manufacturing has deteriorated over the year, and the new tariff agreement between the USA and the EU introduces significant uncertainty for Vienna's manufacturing exports. The forecast for gross value added remains cautiously optimistic at +0.8 percent for 2025 and +1.3 percent for 2026.