Production decline of 14.2% in 2023, new orders falling sharply – results of the entrepreneur survey on the transformation into a climate-neutral industry presented
Vienna (OTS) – “The situation in the domestic industry is dramatic. The current economic survey by the Federal Industry Division shows this very clearly,” say Sigi Menz, Chairman of the Federal Industry Division of the Austrian Economic Chamber (WKÖ), and Federal Division Managing Director Andreas Mörk. They presented the results of the development in the industry associations in 2023 as well as a survey of entrepreneurs on the transformation into a climate-neutral industry today, Friday, in the House of the Austrian Economy in Vienna-Wieden.
Austria’s manufacturing sector recorded a decline of 14.2 percent in the past year of 2023. “Our evaluation has shown that the slump exceeds that of the Corona year 2020,” said Federal Division Managing Director Mörk. In addition to the energy trade associations, the development was particularly negative in the metal technology industry, the paper, wood and non-ferrous metal industries and the chemical industry.
Incoming orders are also falling sharply, especially those from abroad
Another reason for concern is the development of orders in industry: “Incoming orders are declining, especially those from abroad. What is very worrying is that the order situation has permanently deteriorated over the course of 2023. These missing orders will massively reduce production in 2024,” explains Mörk.
Enormous increases in unit labor costs are putting companies under increasing pressure
The downturn is reflected in industrial employment with a slight delay: in 2023, a total of 473,000 people were employed in the approximately 5,000 member companies of the 16 specialist associations of the WKÖ federal industry division. According to managing director Mörk, this means “a slight increase compared to the previous year”. However, the number of employees also fell from September onwards.
For Mörk, this shows two things: “On the one hand, companies are trying to retain their skilled workers despite the difficult production situation. On the other hand, it is becoming increasingly difficult to accommodate the necessary price increases for industrial products made in Austria on the international market due to the exorbitant increase in unit labor costs.”
This is particularly bitter because the Austrian industry is an export champion: the export quota is on average around 70 percent, and in the metal technology industry it is an impressive 88 percent.
Negative economic assessments by entrepreneurs for 2024
The economic assessments of the entrepreneurs of the 16 trade associations of the WKÖ federal industry division for the current year are negative and at most stagnant. Federal division manager Mörk summarizes it as follows: “There is no light at the end of the tunnel.”
“Transformation fever curve”: Industry is committed to transformation, but criticizes the lack of support from politics
A concise picture of the mood emerges from the survey of industrial entrepreneurs about the transformation into a climate-neutral industry. Federal division chairman Sigi Menz: “The industry is committed to continuing the challenging transformation path, sees it as a necessity and also as future business areas. However, those surveyed give politicians an extremely poor rating in terms of goals, accompanying measures, deadlines and, above all, too much bureaucracy.”
For Menz, this surveyed “transformation fever curve” results in the following urgently necessary measures from those responsible for politics in Austria:
- Electricity Price Cost Compensation Act: The rapid extension of the period of validity of the SAG, which dates back to 2022, until 2030, including a simplification of the funding regulations.
- National Emissions Trading Act (NEHG) – liberation of the so-called carbon leakage sectors: no further national solo efforts, the limitation of the CO2 price to a maximum of 45 euros per ton and an equally radical simplification of the reporting regulations.
- The industry urgently needs security of supply. This affects both gas (closing the pipeline bottleneck in Upper Austria; legal action against the German gas storage levy; talks with Hungary and Slovakia to extend the gas transit contract) as well as the necessary rapid expansion of the electricity networks.
- Reduction of non-wage labor costs by 5 percent to the German level, specifically by financing the family burden equalization fund (FLAF) through the public budget and no longer, as before, exclusively through employer contributions.
- Increase in funding for the basic programs of the Austrian Research Promotion Agency (FFG) by 360 million euros per year in order to create an investment lever for the increasing costs of the necessary transformation in the area of research and development.
- Drastic reduction in bureaucracy through reduction of information and reporting requirements, implementation of the EU’s “Data Once Only” principle and rapid digitalization and optimization of official processes.
WKÖ economic symposium “12 Minutes Europe” on competitiveness on April 8th
What needs to be done to survive economically in global competition and to make Europe more attractive as a location again? This is also what the WKÖ economic symposium “12 Minutes Europe – Meeting Global Challenges” will be about on April 8, 2024 at the WKÖ in Vienna. The Chamber of Commerce invites high-profile international and national guests from business, science, politics and the media to exchange ideas. Further information and the possibility to register (attention, limited places!) are available at http://www.12minutes.eu . (PWK126/JHR)
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