Economic Report Vienna

The economic downturn also affected the Viennese economy in the second half of 2022. The still favourable development until the summer nevertheless allowed for the highest regional economic growth in the last decade with +4.4 percent in real terms. Compared to Austria, however, a moderate growth minus remained in 2022, because massive base effects in the recovering tourism sector and impulses from the still lively export and thus industrial economy dominated the economic picture in the dynamic first half of the year, which put Vienna at a structural disadvantage. A slight increase in growth after the summer could not compensate for this. Unlike in Austria, no growth impulses came from Vienna's manufacturing sector in the entire course of the year. Vienna's dynamism in 2022 was thus driven solely by the tertiary sector, which benefitted the Viennese labour market with a tendency towards higher labour intensity in many service branches. Employment therefore grew faster in Vienna in 2022 (+3.4 percent) than in Austria (+3.0 percent), and the regional unemployment rate fell to its lowest level since 2013 at 10.5 percent. This will not continue in 2023: Vienna's economic output is expected to grow by only 0.6 percent (Austria +0.2 percent), which should still be enough for an increase in employment of 0.9 percent (Austria +0.7 percent) – too little to further reduce unemployment.