Austrian economy declined by 0.5% in Q4

Austria’s economic output declined by 0.5% in the fourth quarter of 2024 compared to the same period in 2023, according to preliminary data from Statistics Austria. On a quarterly basis, seasonally and calendar-adjusted real GDP fell by 0.4% compared to the third quarter of 2024. For the entire year, Austria’s GDP contracted by 1.1% in real terms compared to 2023, marking the country’s longest period of economic weakness since 1995.

The economy has been in recession for two years, with declines recorded in almost all sectors. The contraction in the fourth quarter was less severe than in previous quarters, where GDP dropped by 1.9% in the first quarter, 1.4% in the second, and 0.8% in the third quarter of 2024. The downturn was driven primarily by declining activity in manufacturing, construction, and accommodation and food services. However, trade showed signs of recovery towards the end of the year.

The manufacturing sector recorded a 5.6% contraction in the fourth quarter, while construction and accommodation and food services declined by 2.5% and 2.6%, respectively. In contrast, public administration, health, and education grew by 3.5%, and wholesale and retail trade registered a slight increase of 0.4%. For the full year, manufacturing shrank by 5.5%, construction by 4.4%, and accommodation and food services by 3.9%. Public administration, health, and education increased by 2.0%, while wholesale and retail trade declined by 1.7%.

Austria’s economic downturn was also influenced by weaker investment and export activity. In the fourth quarter, gross fixed capital formation fell by 2.1%, with investment in construction down by 3.1%. Exports declined by 5.0%, driven by an 8.4% drop in goods exports. However, consumption showed growth, with a 1.5% increase in the fourth quarter. Private household consumption rose by 0.8% after two quarters of decline, while public consumption increased by 3.1%.

For the full year, gross capital formation fell by 3.4%, with investment in construction down by 5.4%. Exports contracted by 4.3%, while imports declined by 5.0%. Private household consumption stagnated, while public consumption increased by 1.6%.

Compensation of employees at current prices rose by 8.1% in the fourth quarter compared to the previous year, resulting in an 8.5% increase for 2024. Employment remained stable in the fourth quarter, while the number of self-employed persons decreased by 0.5%. Over the year, employment increased slightly by 0.1%, while self-employment declined by 0.2%. Total hours worked grew by 2.6% in the fourth quarter but declined by 1.0% over the course of the year.

Source: Statistik Austria