WIFO-Konjunkturtest

Credit Conditions of Austrian Companies

In February 2024, the credit hurdle – defined as the balance of the proportion of companies that describe banks' lending as accommodating (positive values) and the proportion of companies that describe banks' lending as restrictive (negative values) – improved slightly compared to the previous quarter (+0.5 points) but remained deep in negative territory at –22.9 points. The assessments by company size continue to show differences: the credit hurdle is higher for smaller companies (less than 50 employees) (–25.6 points) than for medium-sized companies (50 to 250 employees: –19.0 points) and large companies (more than 250 employees: –14.6 points).
The survey results show a slight decline in demand for credit (–0.2 percentage points compared to the previous quarter), which at 22.0% in the aggregate (excluding retail) is only slightly above the long-term average (21.0%). In the construction industry, 21.4% of companies reported a need for credit, in manufacturing 21.3%, in the service sectors 22.6% and in retail 18.8%. In terms of company size (excluding retail), 21.9% of smaller companies (less than 50 employees) recently reported a need for credit, 24.3% of medium-sized companies and 21.5% of larger companies (more than 250 employees).
Of the companies with credit requirements (excluding retail), around 41.6% had to cut back on the amount or conditions (31.0% reported worse conditions, 2.1% lower amount and 8.6% worse conditions and lower amount than expected). This figure is still well above the average of the past five years (28.0%). Only around 24.7% of companies requiring credit were able to obtain it as expected (5-year average: 48.5%). At 34.7%, the proportion of companies with credit requirements that did not receive a loan or did not apply for one was also above average (5-year average: 23.5%; around 7.5% of all companies surveyed) because the loan application was rejected by the bank (7.2%), the conditions were not acceptable (17.4%) or they had not tried to obtain a loan due to lack of opportunity (10.1%).