Austria is slipping into recession: “No reason for alarmism”

Economic output fell by 1.8 percent in the third quarter compared to the same period last year. Compared to the previous quarter, the gross domestic product (GDP) fell by 0.5 percent after seasonal and calendar adjustment, Statistics Austria General Director Tobias Thomas told journalists on Friday.

However, the current figures are no reason for alarm, as Thomas noted. The forecasts assumed a slight upturn in the coming months. Although industrial sales in October had already been declining for eight months, the decline was recently smaller than before.

The weaker economic performance was mainly due to industry with a decline of 4.2 percent compared to the same period last year, transport with a decline of 9 percent and trade with a decline of 7.6 percent. The minus here is primarily due to the weaker wholesale trade, as Thomas explained. Retailers are considering clearing out warehouses – a disadvantage for wholesalers. The areas of public administration, education and health contributed to the economic situation with an increase of 5.6 percent.T

Tourism developed positively

Tourism also developed positively, reaching a record level in this year’s summer season: “With more than 80 million overnight stays between May and October, Austrian accommodation providers were booked better this year than in any other summer,” said Thomas. The number of overnight stays increased by 2.4 percent compared to the 2019 summer season, both among guests from home and abroad. While Arab guests discovered Austria as a holiday destination, tourists from Russia left. Regionally, Vorarlberg and Styria in particular recorded increases. And city tourism in the state capitals and in Vienna also recovered from the corona-related crisis, as Peter Laimer, deputy director of Statistics Austria, explained.

More bankruptcies

However, even the positive effects have not prevented more and more sectors from being below pre-crisis levels – i.e. below the level of the third quarter of 2019. In the third quarter of 2023, catering and accommodation only came to 86.4 percent, retail to 90.4 percent and the transport sector to 91.6 percent. But construction, other economic services as well as agriculture and forestry were also below the comparable values ​​from 2019 in the months July to September.

Despite the recent decline, goods manufacturing, mining and energy performed slightly better. Real estate and housing as well as public administration, education, health and social services were also able to increase compared to pre-Corona levels. And the areas of other services (such as hairdressers, culture, gambling), financial and insurance services as well as information and communication achieved an increase of 5.5 to almost 9 percent.

The current economic situation is also reflected in the insolvencies and new start-ups in the third quarter: insolvencies were slightly above the Corona pre-crisis level, while company start-ups are declining.