Improvement in Assessments of the Current Situation Amid Continued Subdued Economic Expectations

The results of the WIFO-Konjunkturtest (business cycle survey) show an improvement in businesses' assessments of the economic situation in August. The WIFO Business Climate Index stood at –1.9 points (seasonally adjusted), 1.8 points above the July figure. Whilst assessments of the current situation have improved noticeably, economic expectations remain cautious – likely due in part to the uncertainties surrounding the war in Iran. Despite the improvement in assessments of the current situation, economic sentiment in the manufacturing sector remains subdued. The current situation indices also improved in the services sector and the construction industry. Demand for credit from businesses has risen slightly compared with the previous quarter. However, the assessment of banks' willingness to lend has deteriorated slightly, with the majority of smaller businesses in particular continuing to regard it as restrictive.