Recovery drags on like a strudel”

Recovery drags on like a strudel”

“The direction is right – but the recovery is dragging on like a strudel.” With this vivid formulation, Manfred Denk, chairman of the federal sector of trade and crafts in the Austrian Chamber of Commerce (WKÖ), opened the economic press conference on October 10th. The sentence is emblematic of the current situation of many companies in the capital goods-related sector: Although there are signs of stabilization, the path back to growth and order dynamics remains a long one.

The situation remains tense

Looking back at the first half of 2025, it can be seen that the negative trends of previous years are weakening, but have by no means been overcome. Nominal sales in trade and craft fell by 1.6 percent; adjusted for prices, there was a real decline of 3.9 percent. This means that the decline compared to the previous year is less pronounced (2024: -7.5 percent), but the order situation remains tense in many areas - especially among small and medium-sized companies, which form the backbone of the sector.

The construction industry is showing its first signs of life

Positive impulses are coming from the industry that was recently deep in crisis: the construction industry. As Christina Enichlmair from KMU Research Austria explained, the current figures from the third quarter of 2025 show an increase in orders of 7.2 percent in the main construction industry, and the auxiliary construction industry even increased by 10.2 percent. The same applies here: the numbers should be viewed against the background of massive declines in previous years - but they are still a signal of stabilization, says Enichlmair.

However, other sectors in the construction-related sector continue to be burdened:

• Holzbau: –9,5 Prozent
• Metalltechnik: –10,1 Prozent
• SHK (Sanitär-, Heizungs- und Lüftungstechnik): –9,2 Prozent

On average, the order backlog in the capital goods-related trades is only 0.4 percent below the previous year - a decline that, according to Enichlmair, is now “hardly noticeable”. The mood barometer is also improving: in the third quarter, 22 percent of companies reported a good business situation and 25 percent reported a bad one. The resulting balance of -3 percentage points is therefore only just in negative territory.

Cautious outlook for the fourth quarter

Overall, expectations for the current fourth quarter remain cautious. Loud SME Research Austria Only 16 percent of companies expect incoming orders or sales to increase. 59 percent expect the development to remain the same, 25 percent expect declines. This results in a net negative expected value of –9 percentage points.

However, Christina Enichlmair pointed out that these values ​​are above those of the previous quarter and the comparable quarters of previous years - a cautiously optimistic signal. “A trend reversal can be seen, the trough has passed, but it remains challenging,” she concluded. The greatest hopes are for a sustainable revival of the construction industry, from which downstream trades could also benefit.

Uncertainty caused by funding policy

State funding policy remains a central issue for companies, particularly in connection with heating conversions and building renovations. Denk sharply criticized the previous model: “Stop and Go makes it impossible to plan sensibly.”
The lull in orders in the summer is largely due to the uncertainty surrounding the future of funding. However, there is now initial clarity: from November there should be one new funding structure take effect – over a period of five years, with a subsidy rate of around 30 percent for heating replacement, insulation and window replacement. Think about it: “It’s better to have a little less funding, but be more plannable, efficient and unbureaucratic – that’s important to us.”

Cost pressure and bureaucracy are a burden

“We have consistently higher energy costs, higher unit labor costs and inflation that is still too high.” Manfred Denk pointed out the competitive disadvantages of Austrian companies compared to neighboring countries - especially in metal and steel construction. “We urgently need structural relief,” was his clear demand. For him one thing is certain: “Reducing bureaucracy is a relief for free.”
This demand was also confirmed by Reinhard Kainz, managing director of the federal trade and craft sector. Kainz spoke of “additional burdens without added value” and gave two concrete examples: the EU Deforestation Regulation, which cannot be implemented due to a lack of clarity, as well as the obligation to accept deposits for disposable drinks packaging, which places excessive demands on smaller, traveling food businesses in rural areas.

Higher professional education

There were encouraging signals from the education sector: the first higher qualification in the field of technical consulting for energy efficiency has officially started in Austria since September 2025. The so-called HBQ (Higher Professional Qualification) is aimed at specialists with appropriate training, for example in the HVAC sector or chimney sweeping. Think: “This is a real path to advancement – ​​without having to go through university or college.” Further qualifications in the areas of metal technology, tourism and trade are being planned. The measure is intended to close the gap between the apprenticeship qualification (NQF 4) and the master's examination (NQF 6). Denk speaks of a decisive step towards securing skilled workers.

Skills competitions: stage for the best

Manfred Denk was visibly proud of the strong performance at the press conference Team Austria at EuroSkills 2025 and resigned with a view to the AustrianSkills The next big vocational training event is in November. The editorial team at Handwerk und Bau followed up: Many companies are confronted with completely different challenges in everyday life - such as a lack of general education, a lack of motivation or social deficits among apprentices. Denk confirmed these problems, but also emphasized the development potential of young people in teaching. Companies in particular can often offer orientation and stability that is missing elsewhere. The skills competitions are not a contradiction, but rather a complementary signal: They show what is possible when training is successful and perspectives are created.
Denk also criticizes the school system: “I doubt whether lessons today really provide the tools for life.” The basis of values ​​has changed, the goal of “prosperity through hard work” only works to a limited extent. It is crucial that young people see meaning in their work. Denk cites green jobs in building technology as an example: “If I can convey that someone is specifically contributing to the climate change, that motivates.”

Housing package 2024: impact manageable

When asked about the effects of the Housing package from the previous government Denk replied soberly: "I don't see any noticeable effects. But I do think that it was helpful in slowing down the downward trend. That was worth its weight in gold." But now it is time to hope for a more sustainable upswing – supported by the construction industry as the economic engine.

Even if the direction is now in the right direction, the momentum remains low: the longed-for upswing is taking place slowly and sluggishly - or, as Manfred Denk put it, "like a strudel dough" - drawn out, unevenly distributed and full of resistance. What is needed now is planning, structural relief and confidence that the transition from stabilization to real recovery is more than just a glimmer of hope.