What Heat Waves Cost the Austrian Economy

Heat waves reduce workers’ performance – especially in physically demanding outdoor jobs. The economic fallout isn’t confined to the hardest-hit industries; it ripples through supply chains and markets across the entire economy.

Construction, agriculture, and manufacturing are hit hardest

How much productivity suffers depends on the intensity of the heat and the type of work. “Workers in construction or agriculture are particularly affected because they often do strenuous work outdoors,” Weyerstraß explains. These sectors see substantial drops in output that spill over into other parts of the economy.

Office workers are less directly affected. The physical strain is usually lower, and air conditioning and other measures can help. “But even here, we also see productivity losses – for instance due to poorer sleep or reduced concentration on hot days,” says Weyerstraß.

Indirect effects hurt the entire economy

“Output losses in the most affected sectors propagate along the entire value chain,” Weyerstraß notes. If construction slows, demand for upstream inputs like cement or metal also falls. “Much of the overall economic impact is due to indirect costs – through adverse effects in supply chains, incomes, and demand levels,” Weyerstraß points out. Model simulations show that these ripple effects can even amplify the initial losses.

Economic costs in the billions

Model simulations for Austria show the scale of the problem: In a scenario of sharply rising temperatures, economic output could decline noticeably within just a few years. In the scenario analyzed, real GDP in year three is about 0.7% – roughly €3 billion – below the baseline without additional heat stress. Over the full three-year period, the total losses add up to around €6 billion. “And still, these figures are on the conservative side,” Weyerstraß emphasizes. “Many of the additional impacts of heat – on health or infrastructure, for example – aren’t even factored in. On the other hand, however, we also didn’t account for any climate adaptation effects, such as rescheduling work to the early mornings and evenings,” he says.

Adapting to the new normal

Alongside efforts to combat climate change, adaptation is becoming increasingly important. “We’ll have to learn how to stay productive in the heat,” says Weyerstraß. More flexible working hours, cooling and ventilation systems, and adequate shade and rest areas at the workplace can help mitigate the effects of heat.

Detailed study results and further information

Kimmich, Christian, Weyerstraß, Klaus, Czypionka, Thomas, Fauster, Norman FRM, Kinner, Maurice, Laa, Elisabeth, Mateeva, Liliana, Plank, Kerstin, Ulrici, Leonhard, Zenz, Hannes, Miess, Michael, Poledna, Sebastian (2025): Economic impact of labor productivity losses induced by heat stress: an agent-based macroeconomic approach. In: Climatic Change (2025). Available at: https://doi.org/10.1007/s10584-025-03879-7