SMEs continue to play a central role in Austria’s economy, accounting for 99.8% of all enterprises and employing nearly two-thirds of the total workforce. Their contribution to gross value added remains significant, at around 63%, underpinning the country’s industrial and service-oriented base. In 2024, SME performance diverged across sectors. Manufacturing and construction experienced mild contractions due to weaker demand and higher input costs, while the hospitality and business service sectors showed stronger growth, supported by increased domestic consumption and tourism recovery. Labor shortages remained a key constraint, particularly in technical and skilled professions.
Austria’s macroeconomic environment in 2024 was characterised by a slow recovery after two years of stagnation. Real GDP grew by approximately 0.7%, while inflation declined from its 2023 peak but remained elevated at around 4.2%, driven largely by energy and housing costs. Monetary conditions began to ease from mid-2024 following the European Central Bank’s first rate cuts since 2022, and lending rates started to decline gradually in the third quarter. Nevertheless, financing costs remained above pre-pandemic averages.
Against this backdrop, SME lending stabilised in 2024 after two years of contraction. The total volume of new SME loans reached around EUR 6.6 billion and the share of SME loans in total new corporate lending stood at around 12%. In 2024, outstanding business loans to non-financial corporations increased marginally to EUR 210 billion, continuing the gradual upward trend observed in recent years. SME lending volumes remained broadly stable at around EUR 93.7 billion, representing 44.7% of the total corporate loan stock. Although lending to SMEs did not expand significantly, stability in credit availability was an encouraging sign given the tighter monetary environment and persistent cost pressures.
Credit conditions improved slightly toward the end of the year but remained tighter than before the monetary tightening cycle. The average interest rate for SME loans eased slightly to 4.5% in 2024, following a peak of 5.0% in 2023, as financial markets began to anticipate further monetary easing by the European Central Bank. Credit spreads between SMEs and large firms narrowed modestly to 0.2 percentage points, reflecting continued risk differentiation but also competitive lending conditions in Austria’s banking sector.
Non-bank finance remains underdeveloped relative to Austria’s bank-based system but is gradually expanding. Venture and growth capital investment rose to EUR 135 million in 2024 after a sharp decline in 2023, supported by later-stage funding rounds. Leasing and factoring also expanded steadily, with factoring volumes exceeding EUR 36 billion and leasing transactions rising to over EUR 6.5 billion.
Non-performing loans (NPLs) remained at historically low levels, 3.1% for SMEs and 2.9% for total business loans. Public support measures introduced during the pandemic were largely phased out, yet SME credit quality remained stable.