The weak economy in construction in Austria continues unchanged. Two thirds of companies in the domestic precast concrete industry are reporting falling sales in the first half of 2024, and the residential construction sector continues to be particularly affected. This emerges from the current half-yearly economic barometer of the Association of Austrian Precast Concrete Plants (VÖB), which was carried out by the Vienna market research institute TQS. This is due to the difficult economic and order situation in conjunction with still high loan interest rates and a lack of economic stimulus packages. “Our forecast that the government’s housing construction measures will not take effect by the end of the year has unfortunately come true. We now hope that a government will be formed quickly and that urgently needed measures will be implemented in order to get housing construction off the ground in the coming year.”warns VÖB President Michael Wardian. There is no relief in sight until the end of the year, as 75 percent of the companies surveyed are expecting a decline in sales this year.
The economic engine in construction in Austria is not yet starting. Companies in the domestic precast concrete industry are particularly feeling this. According to the current economic barometer, 64 percent of the companies surveyed reported falling sales in the first half of 2024. The average decline in sales was around 15 percent and is primarily due to the ongoing poor economic situation and difficult lending regulations of the KIM Regulation. “The economic downturn in residential construction is now worrying, with three out of four surveyed companies in our industry reporting falling sales in the first half of 2024. The interest rate level in the first half of the year in combination with the KIM regulation has practically brought this sector to a standstill. We are now placing little short-term hope in falling loan interest rates,” says Michael Wardian, VÖB President.
But companies in other sectors were also in the red in the first half of this year: half of those surveyed reported declines in sales in office and commercial and industrial construction. Infrastructure and civil engineering continued to have a somewhat stabilizing effect, with sales remaining the same. The reason for this lies in the investments made by the public sector.
Gloomy forecasts
The economic forecasts will remain cloudy until the end of the year: 75 percent of the companies surveyed expect sales to fall in the second half of 2024, and the forecasts for the entire industry are even bleaker: nine out of ten respondents (92 percent) expect a decline in sales.
The weak economy is also affecting the number of employees: by the end of 2024, the number of employees will decrease at around half of the companies surveyed. “At the same time, our member companies strive to keep employees where possible: 75 percent of those surveyed take concrete measures in the area of employer branding and employee benefits,” says Anton Glasmaier, VÖB Managing Director.
Industry as a pioneer in terms of ecological balance
At the same time, the demand for CO2-reduced precast concrete parts is increasing; around two thirds of companies have already been confronted with such requirements from their customers. “The issue of sustainability of our products has arrived in the precast concrete industry. The VÖB has now had environmental product declarations – the so-called industry EPDs – created and independently verified for seven relevant product areas and an additional twenty products. In this way, we ensure the transparency of the environmental data of the VÖB member companies,” explains Glasmaier. The environmental product declarations (EPD) serve as the basis for calculating the environmental impact when constructing buildings with prefabricated concrete elements.
