Between September 12 and 16, 2024, parts of Austria experienced five times the usual rainfall for the entire month, resulting in devastating floods. CSH, ASCII, and WIFO have now released the first damage estimate.
According to a recent Research Brief by the Complexity Science Hub (CSH), the Supply Chain Intelligence Institute Austria (ASCII), and the Austrian Institute of Economic Research (WIFO) the flooding events in Austria between September 14 and 21, 2024, resulted in damages totaling €1.3 billion. This estimate includes production losses and damaged inventory in businesses directly affected by the flood disaster, as well as disruptions in companies indirectly impacted through supply chain effects. Damages to the agricultural sector were also considered in detail. For private households, the estimates from the Austrian Insurance Association (VVÖ) were used. Infrastructure damages were not included due to a lack of available data.
You can find a visualization of the results at:
https://ascii.ac.at/news/flooding-in-austria-interactive-map/
NEARLY 700 COMPANIES SEVERELY AFFECTED
To calculate losses in the industrial sector, direct damages were included, such as the destruction of stockpiles or disruptions to operations (e.g., due to clean-up efforts or destroyed machinery). An input-output model, specifically tailored to natural disasters, was used to assess the indirect economic impact of the floods on the regional economy.
Official reports indicate around 900 affected companies. According to the model, 841 companies were impacted by the floods, with 676 of them being severely affected. While some of these businesses certainly suffered devastating losses, the overall damage, relative to Lower Austria’s annual gross value added, was limited to between 0.03% and 0.09%. This amounts to roughly €300 to €900 million, with 2020 as the reference year.
RECORD DAMAGES FOR PRIVATE HOUSEHOLDS
Estimates from Austria’s hail insurance provider, the specialized insurer for farmers, suggest losses totaling €10 million. However, this does not fully capture the extent of the losses, as deductibles must be paid for crop failures, and not all farmers are insured. To assess the total damage, geodata was used to identify crops located in the affected fields. As a result, a maximum damage sum of €14.7 million was calculated.
For private households, data from the Austrian Insurance Association (VVÖ) was utilized. It reported record losses of €700 million for households.
CURRENT COMPENSATION MODEL NEEDS REFORM
“With this model, we can quickly pinpoint economic damages and highlight where measures can be effectively implemented,” summarized CSH scientist and ASCII Director Peter Klimek, on his institute’s contribution to managing natural disasters.
“Extreme rainfall and subsequent flooding, such as those in Central Europe in September 2024, are extreme weather events. Due to climate change, these events are becoming more frequent and, above all, more intense. This is why developing methods for rapidly estimating economic impacts is essential. It allows for the introduction of appropriate measures and helps mitigate potential losses,” explained ASCII Deputy Director and WIFO economist Klaus Friesenbichler.
In conclusion, a comparison with previous flood disasters shows that Austria was generally well-prepared for potential flooding, which helped prevent significant economic damage. This is partly due to the country’s annual investment of around €60 million in flood protection. However, there is room for improvement in the compensation model, which makes affected households and businesses dependent on the disaster fund and offers little incentive to avoid building in high-risk areas.
About the study
The Research Brief “Rapid Assessment of the Economic Impact of the Central European Flood 2024 on Austria” by K. Friesenbichler, L. Ialongo, P. Klimek, A. Renhart, and F. Sinabell is available for download here.
