Austria’s manufacturing sector is facing tough times, with a 14.2 percent decline in production value in 2023 compared to the previous year. This recession may persist for a long time, according to Siegfried Menz, chairman of the federal industry division in the Chamber of Commerce (WKÖ). The energy, metal technology, paper, wood, non-ferrous metal, and chemical industries were among the sectors experiencing significant negative developments.
The order situation also worsened in 2023, with incoming orders falling, especially from overseas markets. Despite this challenging environment, employment figures in the industry remained stable at around 473,000 people. However, companies are struggling to retain their skilled workers due to high unit labor costs and labor costs.
Looking ahead to 2024, industry representatives do not see any improvements on the horizon as economic assessments for the current year are predominantly negative or stagnating. They are calling for politicians to extend electricity price compensation and ensure security of supply in the energy sector while increasing funding for research and development.
To enhance competitiveness and support businesses during this challenging period, the WKO is advocating for a reduction in non-wage labor costs to the level seen in Germany and financing the family burden equalization fund (FLAF) through public budget cuts. Additionally, they seek streamlining information and reporting obligations by reducing bureaucracy.
Overall, Austria’s domestic industry is facing tough times with falling production and high unit labor costs leading to concerns about competitiveness. However, industry representatives are working hard to maintain stable employment figures while advocating for better framework conditions from politicians to navigate through these challenging times successfully.
