Austrian Expert Voice ‒ Fall 2025

by Michael Klien, WIFO - Austrian Institute of Economic Research

ABOUT THE AUTHOR

Michael Klien

WIFO - Austrian Institute of Economic Research

www.wifo.ac.at

michael.klien@wifo.ac.at

Michael Klien is senior researcher at the Austrian Institute for Economic Research (WIFO). He completed his master's and doctorate studies at the Vienna University of Economics and Business Administration and then worked as a postdoc at the IAE de Paris, Sorbonne Graduate Business School. In his function as construction and housing expert, Michael is the Austrian representative in the EUROCONSTRUCT network. His research centers on the organisation and performance of public services, ranging from public economics, political economy, organisational studies to institutional and industrial economics.

“Austria’s construction industry at a turning point – stabilising residential construction, headwinds in civil engineering.”

Austria’s construction industry is at a turning point, following two years of recession, with a fragile economic recovery driven primarily by private consumption. Growth in the construction and industrial sectors remains slow due to the lingering effects of the 2022 energy price shock, restrictive monetary policy, and international trade challenges. Public sector austerity and high financing costs continue to weigh on infrastructure investment and non-residential construction.

Despite initial signs of stabilisation in residential construction and real estate transactions, the sector faces significant challenges. Public investments are constrained by budget cuts, causing delays or scaling back of projects in transport, education, and healthcare infrastructure. Uncertainty over interest rate developments, fiscal consolidation measures, and structural shifts such as digitalisation and sustainability add to the risks facing Austria’s construction industry in the coming years.

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