Investment Momentum is Projected to be Mixed in 2026

The results of the WIFO Investment Survey suggest that investment activity in 2026 will likely remain subdued. The war in Iran and the pronounced geopolitical uncertainty dampened the nascent economic recovery. The majority of manufacturing firms are planning to cut their investment. The services sector as a whole reports stagnating investment. At the subsector level, however, the picture is mixed. Within manufacturing, it is primarily manufacturers of investment and intermediate goods who report reductions in their investment plans. In the services sector, positive reports predominate in most sectors. By contrast, the trend is negative in the investment-intensive "other economic services" sector. While small and medium-sized enterprises are expected to scale back their investment, large firms report rather expansionary plans. The weak investment momentum is driven by declines in the equipment and infrastructure sectors. WIFO forecasts for the Austrian economy as a whole exhibit a considerable range in real gross fixed capital formation for 2026, depending on the further course of the war in Iran.