Business sentiment among Austrian companies has worsened compared to last year, according to a recent survey by the credit protection association KSV1870. Only 43 percent of businesses currently rate their business situation as “very good” or “good”—a drop of 7 percentage points from March of the previous year. This marks the lowest figure since the start of the COVID-19 crisis in 2020. As a result, many companies are being forced to tighten their belts.
The main reason cited for the economic challenges is the high cost environment. While 41 percent of businesses were able to increase their revenues in the past year, these gains were offset by high energy prices and rising supplier costs. Nearly one-third (31 percent) reported a decline in sales, and in the retail sector, the figure was as high as 40 percent.
Highest Satisfaction in the Service Sector
Only 19 percent of companies expect their economic situation to improve this year, according to the Austria Business Check survey. However, there are significant differences depending on the industry and region. The service sector showed the highest satisfaction rate, with 49 percent of respondents reporting a positive outlook, whereas in retail, only 29 percent agreed. “Retail is currently the biggest concern for the domestic economy,” said Ricardo-José Vybiral, CEO of KSV1870 Holding. “Many companies are barely able to breathe. This is also reflected in the high insolvency numbers recorded in the first quarter of 2025.”
In the industrial sector, business sentiment fell by 24 percentage points to just 32 percent. Regionally, Vorarlberg fared the worst, with only 20 percent of companies reporting satisfaction with their current situation.
Saving Measures on the Rise
Given the tense situation, eight out of ten companies have implemented savings programs or cut back on operating expenses. The share of businesses that positively assessed the development of their equity over the past three years also declined, from 42 percent to 37 percent. “Companies are increasingly feeling the effects of the ongoing economic difficulties on their savings accounts,” said Gerhard Wagner, Managing Director of KSV1870 Information GmbH. “The situation is intensifying, and it seems that many businesses are having to dip into their emergency reserves, especially when it comes to funding investments.”
A particularly negative trend is evident in the hospitality and accommodation sectors, where 52 percent report a downturn. In retail, only 33 percent of companies reported a positive development in equity.
It is therefore not surprising that investment remains subdued this year. Only 16 percent of businesses plan to invest, while 40 percent are still waiting. Of those who will invest, 59 percent intend to do so moderately, and just 10 percent are planning major purchases. “Overall, 42 percent of investments are aimed at keeping the business running,” said Wagner. “38 percent are directed at innovation and development, while 16 percent are allocated to employee-related investments.”
One in Five Companies Took Out a Loan
Around 20 percent of Austrian companies took out loans last year. This was especially common in the hospitality sector (32 percent) and the real estate and housing sector (30 percent). A similar trend is expected this year. Already, 12 percent are planning to apply for a loan, while 15 percent are still undecided. However, nearly two-thirds of respondents describe the loan process as “very difficult” or “difficult,” citing increased demands for both personal and business collateral, as well as a heavy administrative burden.
The survey, conducted in March in collaboration with the market research institute Marketagent, included responses from 1,100 companies.
