100th Euroconstruct Conference: European Construction Market Outlook until 2028 – Austrian Construction Market Development. Country Report Austria

Michael Klien and Michael Weingärtler
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Michael Weingärtler: WIFO

in WIFO Studies from WIFO

Abstract: Following a two-year recession, Austria's economy shows signs of fragile recovery with modest GDP growth projected for 2025-2026. The downturn was driven by the energy price shock, weak external demand – particularly from Germany – restrictive monetary policy, and U.S. tariff impacts. Private consumption leads the recovery, while investment remains subdued before gradual improvement. Inflation re-accelerates in 2025 due to expiring energy caps before easing, and unemployment peaks before declining slightly. The construction sector shows mixed dynamics: residential construction stabilizes as ECB rate cuts lower financing costs, with building permits rising. Non-residential construction faces continued contraction due to weak demand and high financing costs. Civil engineering, previously resilient, now confronts significant fiscal constraints, with investment growth slowing sharply and projected to decline. Large budget deficits necessitate consolidation measures that weigh on public infrastructure investment and overall growth prospects.

Keywords: Austria; Construction; Housing; Non-Residential; Civil Engineering; Economy; Forecasts (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:wfo:wstudy:65062654

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