Austria

Overall construction activity

The year 2021 is dominated by the economic recovery after the Corona pandemic. GDP grew particularly strongly in the first half of 2021 in those sectors that were affected by the restrictions in the previous year. The labour market also continues to recover rapidly and has already returned to pre-crisis levels. However, the increase in infections from August onwards has somewhat clouded the outlook for the second half of the year and will dampen the catch-up process somewhat. The economic upswing is nevertheless relatively strong overall, but sectorally heterogeneous. The WIFO forecast for 2021 is now +4.4% (real). Due to expected complete normalization of the economic situation, significant growth impulses of 4.8% can then also be expected in 2022. From 2023 onward somewhat weaker growth rates are again expected.

The construction industry not only successfully weathered the Corona pandemic but was also able to report solid growth in 2021 even without a recovery effect. The decline of 2020 (-3.7%) is clearly overcompensated this year with 5.4%. This is remarkable as construction production has been affected to some extent by material and supply bottlenecks. However, the shortage of materials has at most dampened the upswing in the construction industry, but not prevented it. All sub-sectors of the construction industry will show significant growth movements in 2021. In 2022, above-average growth of 2.6% is also expected, but at a lower level without the recovery effect of 2021. 2023 and 2024 should then only see a growth of just under 2%.

Housebuilding

Residential construction was one of the big growth pillars during the Corona pandemic in 2020 and was significantly less affected than other areas of the economy, and also one of the most stable segments within construction. The uncertainty during the pandemic may even have partly given additional impetus to residential construction, which, in addition to the significant increase in property prices, also led to more building permits for detached and semi-detached houses. Overall, there remains a high demand for real estate in Austrian residential construction despite the lower population dynamics. And at present, there is no substantial turnaround in the high investment demand in sight, as the latest figures on building permits show. Although the renovation sector is gaining in importance in Austrian residential construction, not least due to the changed political framework conditions (EU climate targets, national CO2 price), at the time not more than a moderate increase is to be expected.