Fourth COVID-19 Wave Dampens Economic Sentiment

The results of the January WIFO-Konjunkturtest (business cycle survey) show on a quarterly basis a decline in economic momentum. However, in all sectors except retail trade, economic indicators remained at confident levels. Due to the easing of health policy restrictions in January, the WIFO-Konjunkturampel (economic traffic light) jumped to green. Business uncertainty remains high. Capacity utilisation fell in the service sectors but remained high in all sectors. As in the previous quarter, the "shortage of labour force" was cited as the most important obstacle to business activity. In manufacturing, construction and retailing, shortages of materials and inputs continue to hamper business activity.