Austria’s Construction Prices Rise Moderately in 2024 Amid Ongoing Challenges
AUSTRIA: Construction prices in Austria saw a moderate increase of 1.3% in 2024 compared to the previous year, according to the latest report from Statistics Austria. Although price growth slowed over the year, the construction sector continues to face significant economic challenges. Residential construction, in particular, is grappling with high building and financing costs, which could have lasting effects on the labor market and future housing supply.
The construction price index reached 123.1 points in 2024 (with 2020 as the base year at 100 points). Building construction experienced a sharper rise of 1.6%, compared to a more modest 0.9% increase in civil engineering. Within building construction, the "other building construction" category saw the highest price growth at 1.9%, while residential and housing construction costs rose by 1.3%.
In civil engineering, price trends varied: road construction costs increased by 1.2%, bridge construction by 1.3%, and other civil engineering projects saw a minimal rise of 0.5%. Despite these relatively moderate price hikes, the construction industry remains under pressure. The Austrian Institute of Economic Research (WIFO) forecasts a real decline of 3.5% in the sector's value-added output for 2024. Building construction, especially in the residential segment, continues to struggle with high financing costs, stricter lending conditions, and reduced investment activity.
These economic strains are already visible in the labor market. After years of skilled labor shortages, the sector now faces the risk of declining employment. Many companies report decreased demand for construction projects, particularly in private residential construction, and public investments have only partially offset this trend.
While construction prices rose moderately in 2024, the industry confronts significant challenges. The sustained drop in residential construction demand could have long-term implications for employment and housing supply. The coming months will reveal how effective political and economic measures are in stabilizing the sector and fostering renewed growth.
Source: Statistics Austria