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

Author

Listed:
  • Michael Klien
  • Michael Weingärtler

    (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.

Suggested Citation

  • Michael Klien & Michael Weingärtler, 2025. "100th Euroconstruct Conference: European Construction Market Outlook until 2028 – Austrian Construction Market Development. Country Report Austria," WIFO Studies, WIFO, number 65062654, October.
    • Handle: RePEc:wfo:wstudy:65062654
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    File URL: https://www.wifo.ac.at/?p=438673
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