In all federal states, GDP shrinks

Economists of the Unicredit-Bank-Austria have analyzed the economic development of the federal states. They confirm the dreary economic situation, because in 2024 there was a state of the gross domestic product (GDP) in a row despite global stabilization, a growth from federal states only in Vienna. Unemployment increased in all countries. The prospects are delicate, industry and construction continue to suffer. And: US President Donald Trump unsettled.

The growth in Vienna was also minimal compared to 0.4 percent compared to 2023. In all other federal states, a minus faces development. In Upper Austria and Carinthia there was the largest decline with minus 2.7 and minus 2.4 percent. This was followed by Vorarlberg (minus 1.8 percent), Lower Austria (minus 1.7 percent), Burgenland (minus 1.0), Styria (minus 0.8), Salzburg (minus 0.7) and Tyrol (minus 0.5 percent).

Industrial regions particularly steamed

« As in 2023, the industrial regions once again experienced a damper, without significant positive impulses from the service sector, » said Unicredit-Bank-Austria chef economist Stefan Bruckbauer. The added value in construction collapsed by 4.4 percent, those in industry by 5.5 percent. Only the pharmaceutical industry grew strongly, a mini-plus recorded metal processing. Otherwise there was stagnation or sometimes immense declines in all industrial areas.

Overall, investments decreased by 3.4 percent, even by 5.4 percent in construction – especially because of the dating residential construction. Burgenland and Carinthia were particularly negative. « The steamed demand in residential construction due to high construction costs and higher interest rates made the construction economy massively, » said Robert Schwarz, economist at Unicredit-Bank-Austria. The trade also braked the economy in all regions.

Economy shrinks, unemployment increases

In 2024, the Austrian economy shrank by 1.2 percent. Private consumption stagnated that public consumption supported with an increase of 1.6 percent. The net exports also recorded a plus again. The reason for this was somewhat more falling real imports than exports. The service sector recorded a slight increase in value creation, which had a positive effect on the situation in Vienna, but also something in Burgenland. Tyrol and Salzburg, on the other hand, were affected by a weak tourism value added.

The unemployment rate rose from 6.4 percent across Austria to 7.0 percent on average 2024. The plus was also above average in Vienna and Styria. Like 2023, Salzburg recorded the lowest unemployment rate at 4.2 percent, Vienna with 11.4 percent by far. Nevertheless, there was the strongest employment growth of 1.0 percent in the federal capital.

Throughout Austria, employment only grew by 0.1 percent, there were declines in Upper Austria (minus 0.7 percent), Styria and Carinthia (minus 0.3 percent), Lower Austria (minus 0.2 percent) and Burgenland (minus 0.1 percent). The public sector and the field of information technology supported the growth that at least reached 0.7 percent in Tyrol and Salzburg and stagnated in Vorarlberg. The unemployment rate is increasing to 7.5 percent this year and next year.

Third year of recession in a row, « bottom light Carinthia »

The bank experts write about the prospects of a gradual economic improvement. « Living in A Trump-World » means great uncertainties, alluding to the erratic (customs) policy of the US president. This year the Alpine Republic is counted on the third year of recession in a row, the forecast shows minus 0.2 percent. It is not until 2026 that growth of 1.1 percent was seen again.

After all, almost all federal states are expected this year with higher growth than in 2024. The strongest plus – and this is not a big one – is expected for Vienna and Burgenland at 0.4 percent each. Trist looks like the « Central Light Carinthia », as the Bank Austria puts it, here a further decline of 1.1 percent is expected.

Inflation further over 2.0 percent this year

Bank Austria puts the inflation prospects (VPI) for this year with 2.5 and for next year with 1.9 percent. The target value of the ECB is 2.0 percent. Public debt continues to climb 84.7 percent this year to 86.4 percent next year. (APA)