AMS Director Johannes Kopf does not expect unemployment in Austria to decline before 2026. The ongoing weak economic performance has been driving up unemployment figures since 2023. By the end of June, 364,419 people were registered as unemployed or in training with the Public Employment Service (AMS), including 288,545 unemployed individuals and 75,874 participating in AMS training programs. Compared to the same month last year, the number of unemployed and training participants rose by 7.8 percent.

The unemployment rate increased by 0.5 percentage points in June, reaching 6.8 percent. “These developments highlight the importance and necessity of active labor market policies to stabilize employment,” said Labor and Social Affairs Minister Korinna Schumann (SPÖ). The AMS board recently decided to raise the AMS funding budget “by an additional €40 million in 2025.”

Economic recovery not yet visible in job market

Although economic researchers at IHS and Wifo recently revised their forecasts upward and no longer expect a third recession year for Austria, AMS Director Kopf noted: “Even if economists and the industry see a first glimmer of recovery on the horizon, employment is still declining, and unemployment has been rising significantly since April 2023.” According to preliminary data from the labor ministry and AMS, the number of employees in June 2025 was 3.982 million — 5,000 fewer than in June 2024.

Kopf expects positive labor market news only next year. “In 2026, the economy should grow again — at least by over one percent — and together with demographic trends and reduced working hours, unemployment should begin to fall,” he said on Ö1’s “Mittagsjournal” on Tuesday. However, he sees “no real improvement” in sight for employment in Austria’s automotive supply industry due to the ongoing weakness of the German car sector.

The prolonged economic downturn is also evident in job postings. The number of immediately available job openings reported to the AMS fell by 13.8 percent year-on-year in June, to 84,357. Meanwhile, the ÖVP-affiliated Economic Association, which monitors all job portals, recorded 162,938 open positions.

Industry hit hardest by rising unemployment

According to AMS, the manufacturing industry and the federal states of Upper Austria and Salzburg were again hit hardest. The largest year-on-year increases in unemployed and training participants in June were in the health and social care sector (+13.6 percent) and manufacturing/industry (+13.2 percent). Increases were somewhat lower in retail (+10.6 percent), transport and logistics (+8.4 percent), and hospitality (+7.2 percent). Only slight increases were seen in construction (+1.1 percent) and temporary employment (+0.9 percent).

AMS said the sharp rise in the health and social sector was largely due to statistical reasons. Employment in this field is growing rapidly due to increased demand for care and the outsourcing of previously public services to private providers. As a result, these workers are no longer counted as public employees but as part of the health and social services sector. Accordingly, employment in the sector increased by 4.5 percent (+14,355 people).

Tourism labor market remains tense

Despite rising overnight stays, Austrian tourism businesses remain cautious in their hiring, according to the AMS. “We are not yet seeing a real recovery in the tourism labor market,” Kopf said in a new AMS special report. “After two years of recession, tourism businesses remain cautious in their personnel planning.” Unemployment in tourism increased by 10.2 percent in the summer season and by 7.5 percent in the winter season compared to the previous year. Austrian tourism is highly dependent on foreign workers. The proportion of Austrian citizens in tourism jobs has fallen by a quarter over the past decade, now at just 41.3 percent, while nearly 60 percent of workers come from the EU and third countries.

The biggest regional increases in unemployment and training participation were recorded in Upper Austria (+13.2 percent), followed by Salzburg (+12.8 percent), Vorarlberg (+10.5 percent), Tyrol (+10.1 percent), and Styria (+8.0 percent). Smaller increases occurred in Lower Austria (+6.7 percent), Vienna (+6.2 percent), Burgenland (+5.7 percent), and Carinthia (+4.9 percent). Vienna recorded the highest unemployment rate at the end of June with 11.4 percent, followed by Burgenland (6.1 percent), Lower Austria (6.0 percent), Styria (5.9 percent), Carinthia (5.8 percent), Vorarlberg (5.7 percent), and Upper Austria (4.9 percent). The lowest rates were in tourism hotspots Salzburg (3.8 percent) and Tyrol (3.7 percent).

Calls for more anti-unemployment measures

FPÖ social affairs spokesperson Dagmar Belakowitsch called for “immediate measures against rising unemployment, the ongoing wave of insolvencies, and the increasing strain on the welfare state.” SPÖ spokesperson Josef Muchitsch said the Austrian labor market needs “job creation, training, and economic growth.”

WKÖ Secretary General Jochen Danninger called for a focus on qualification programs for young people, such as workplace-based AQUA training. Federation of Austrian Industries Secretary General Christoph Neumayer once again urged incentives for full-time employment. Chamber of Labour President Renate Anderl called for a major training initiative targeting youth and specific projects to combat youth unemployment.