Business Uncertainty and Economic Policy Risk Factors in the COVID-19 Crisis

Economic uncertainty increased massively due to the COVID-19 pandemic. A survey of Austrian industrial companies implemented in summer 2020 allows to paint a more detailed picture of the causes and effects of this development. Potential effects on demand and supply bottlenecks were reported as the most frequent causes of the increase in uncertainty in the COVID-19 crisis. Uncertainty had a negative impact on investment and employment. In addition to digitalisation, the most important strategic measures taken by companies to counter uncertainty included liquidity and risk management. During the COVID-19 pandemic, economic policy aspects of business uncertainty lost some of their importance. However, the development of the global economy and international remained key economic policy risk factors according to Austrian industrial companies. National risk factors were easier for the companies to assess, although tax policy and environmental regulations were rated as relevant risks.