Economy of Burgenland continues to falter: 'Yet another year of recession'
The Burgenland's industrial climate remains somber in the first quarter of 2025, with half of the companies merely rating their situation as "average." Foreign orders show a slight improvement but still lag, due to ongoing geopolitical uncertainties. Business owners anticipate a brighter outlook for selling prices in three months, yet job forecasts plummet to an all-time low.
According to IV-Burgenland CEO Aniko Benko, the region is bracing for another economic downturn in 2025. Here's a rundown of the latest industry survey results.
Business situation: Waning optimism
Assessments of the current business situation have worsened compared to the previous quarter: Just 36% of companies rate it positively, while 50% see it as "average" and a depressing 14% categorize it as "poor." Order backlogs remain uncertain, with 35% reporting good levels, 52% viewing them as average, and 13% rating them as poor.
Foreign orders and selling prices: Tentative recovery
There's a hint of improvement in foreign orders: The proportion of negatively inclined firms has dropped significantly (from 29 to 13%) since the last quarter. However, overall assessments remain cautious: 26% report good foreign orders, while 57% see them as average.
The outlook for selling prices in three months is particularly interesting: While 51% anticipated falling prices in the previous quarter, this figure has dropped to 22%. Simultaneously, the number of those expecting higher prices has risen to 12%.
Employment forecast: Bracing for impact
However, employment expectations are dramatically more pessimistic. Only 13% of companies predict an increase in employees, while a dismal 32% anticipate a decrease in staffing levels - the lowest value since December 2023.
Benko attributes the difficult situation to soaring energy costs, bureaucracy, and personnel expenses, along with international trade disputes and the global economic slump. The trade conflict with the USA and the fragile world economy adversely affect Burgenland's export-oriented industrial sector.
Outlook: Cautious optimism
Benko underscores that economic growth doesn't just happen—it requires proactive and visionary policies. The industry is a vital contributor to Burgenland's prosperity, representing almost 30% of gross value added.
A cautious optimism can be seen in the anticipation of the business and profit situations in six months. Both have shown a slight recovery from their low levels in the previous quarter, although they are still underwhelming. Just 20% of companies expect a strong business situation, while 24% foresee a challenging one.
In conclusion, the Burgenland economy confronts further challenges, necessitating a bold and forward-looking industrial policy to regain momentum. Keep an eye on industry surveys from the Industrial Association (IV) Burgenland and the Economic Chamber Burgenland for more detailed insights on the region's economic landscape.
- In the first quarter of 2025, the Burgenland's industrial climate remains somber, as Aniko Benko, CEO of IV-Burgenland, suggests a looming economic downturn in the region.
- The business situation has worsened compared to the previous quarter, with only 36% of companies rating it positively, 50% seeing it as average, and 14% categorizing it as poor.
- Aniko Benko attributes the difficult situation in Burgenland to soaring energy costs, bureaucracy, personnel expenses, international trade disputes, and the global economic slump, which affect the export-oriented industrial sector, particularly.
- The industry represents almost 30% of the gross value added in Burgenland, making it a vital contributor to the region's prosperity.
- Despite the challenging economic outlook, a slight recovery can be seen in the anticipation of the business and profit situations in six months, although it remains underwhelming, with only 20% of companies expecting a strong business situation and 24% foreseeing a challenging one.
