After a good start in 2022, economic sentiment in Austria clouds over. According to the May 2022 UniCredit Bank Austria economic analysis, the war in Russia and high energy prices will put brakes on the Austrian economy in the coming months. A slowdown is already visible in the industrial and construction sectors. The service sector is burdened by inflation but benefits from removal of pandemic measures. Overall, the economists expect the Austrian economy to grow by 3.6 percent in 2022 and by 2.6 percent in 2023. The unemployment rate will remain in the 6 percent range while the inflation will come down from 5.9 in 2022 to 2.3 percent in 2023.
The manufacturing sector is challenged by cooling of the export environment. Worsening supply problems and rising costs for primary and raw materials, especially energy, are denting confidence for the next months despite good capacity utilisation and a strong order situation.