Caution or concern raised about 'excessive optimism' in sector
Austria's Industrial Sector Shows Slight Recovery
The Austrian industry begins the year with a glimmer of hope, as the Economic Barometer of the Industrial Association (IV) climbed into positive territory for the first time since mid-2023, registering 1.8 points in the initial quarter of 2025. However, the IV cautions against undue optimism, citing U.S. trade policies as potential pitfalls.
"The positive shift in the IV's Economic Barometer indicates a modicum of vitality in the industrial sector, yet it necessitates a breakthrough in economic policies to achieve recovery," emphasizes IV's chief economist, Christian Helmenstein. This view reflects a longstanding industry demand for policy reforms.
Current Business Landscape Continues to Deteriorate
The barometer for the current business situation remains negative overall, recording a score of minus four points. This is an improvement for the first time since mid-2021. On the other hand, expectations for the business situation in the coming six months have observed a significant spike, reaching plus seven points.
A Cautious Optimism
Christoph Neumayer, the IV's general secretary, comments, "The data suggests a clear call to action for swift political intervention to help sustain and reinforce the tender sprouts of stabilization."
For this study, the IV polled 382 companies to evaluate their current business situation and outlook. The figure derived from the balance of positive and negative responses represents their assessment as positive, neutral, or negative.
Despite the recent improvement, the overall economic outlook for Austria continues to face challenges. A prolonged recession, elevated inflation, and strained export competitiveness stemming from U.S. tariffs are prime factors contributing to the uncertain economic landscape.
Even as hopeful signs such as improving construction and consumer demand emerge, the immediate economic outlook remains fraught with difficulties. For 2026, forecasts suggest a modicum of growth, with GDP predicted to expand by 1.0% to 1.2%, and inflation expected to decrease to around 2.1%.
[Reference Links][1] Official IV Quarterly Economic Barometer Report 2025[2] WIFO Economic Forecast for Austria 2025[3] Austrian Federal Government Report on Trade Policies 2025[4] European Central Bank Inflation Report 2025[5] OECD Economic Outlook for Austria 2026
The Austrian industrial sector's recovery might require improvement in economic policies to maintain its momentum, as highlighted by Christian Helmenstein, the IV's chief economist (money, finance, business). Unfortunately, the ongoing uncertain economic landscape is marked by a prolonged recession, elevated inflation, and strained export competitiveness due to U.S. tariffs (money, business).
