IHS boss looks to 2024 with caution and optimism

“Citizens can first prepare for the fact that things will be better for them financially than last year,” says Bonin. People actually have more in their wallets, but caution is still advised. After the loss of prosperity as a result of Corona and the war in Ukraine, there is now a certain dry spell. “If we’re lucky, by the end of next year we’ll be roughly where we were before the corona crisis.” But it may take until the year after next.

The Signa bankruptcies would of course have an impact on the real estate market. “On the financial market, i.e. when it comes to the banks, the impact will probably be limited because it is spread across very, very many players,” said the IHS boss in the Ö1 interview series “Im Journal zu Gast”. The damage to the domestic economy is unlikely to be very serious. “The properties are worth something, they need to be refinanced. The increased interest rates play a big role in this. There will certainly be vacancies in some locations.” This will also lead to layoffs, and it may also have an impact on other companies in the construction industry, which is not doing well overall.

Building construction in severe recession

Building construction is in a severe recession, but it has to be maintained because apartments are needed for the influx. But you also have to build a lot for the energy transition. The state could intervene in a stabilizing manner through subsidized housing construction, but must be careful not to overheat the market.

To finance it, you shouldn’t increase taxes, but rather look through the budget, advises Bonin. “We still have a very high proportion of climate-damaging subsidies; the commuter allowance is one of the most prominent examples of this.” This is made more difficult by demographic developments and the high proportion of pension expenditure. Not much will happen with the necessary structural reforms in the 2024 election year because the measures are not very popular – people may have to work longer. “But a new government may have the chance to put in stakes at the beginning of a new legislative period.” There is also currently a lack of a clear strategy with long-term commitments when it comes to climate protection policy.

Concern for Austria’s competitiveness

The IHS economist sees Austria’s competitiveness as cause for concern. A key factor here is the high energy price level. This applies even more to Germany than to Austria, for example in the steel industry and chemicals. Austria’s economy is more broadly based, for example through tourism and strong niche providers. “That’s why I’m more optimistic about this issue of deindustrialization for Austria than I am for Germany at the moment.”

There is also “certainly room for improvement” when it comes to digitalization and artificial intelligence, although Europe is lagging behind the dynamic economies of the USA and Asia.

Better working conditions to combat a shortage of skilled workers

When it comes to the shortage of skilled workers and the labor market, companies are more challenged than politicians. In the past, companies would have hoarded workers because skilled workers were hard to come by, but that could now be overturned in response to increased wage costs. Companies could counteract this through better working conditions, for example through more flexible working time models and the compatibility of family and career. Spatial mobility could be promoted, for example, through mobility bonuses to help with moving costs, part of which could be tax-free.