Austrian industry must prepare for a recession. Nothing will come of the hoped-for revival this year. This is evident from the latest economic survey of the Federation of Austrian Industries (IV), which was presented on Tuesday. For example, a new or similar condition of the investment premium for the Covid pandemic is needed so that the likely inevitable winter recession in the industry can be quickly overcome, said IV Secretary General Christoph Neumayer. According to him, it is about investing as quickly as possible out of the “valley of tears”.
“The recipe for success of the investment premium has led to targeted investments in times of the Covid pandemic – every Euro invested has mobilized about 10 Euros of investment.” The premium can also be further developed and, according to the industry representative, would certainly help a lot.
IV economic barometer is exactly at zero
“The deterioration in the economic outlook is structural, not seasonal,” said IV chief economist Christian Helmenstein. The IV economic barometer is exactly zero – the balance of the average current assessment of the business situation and that for the next six months. “In the best case scenario” next spring it can go up again.
Thousands of manufacturing jobs are staggering
Several thousand jobs in the industry are also at risk of disappearing in the next three months. “This underlines how much production is taxed,” says Helmenstein. However, most jobs are shaky in construction and related professions, it said. To stimulate this, Neumayer spoke out in favor of relaxing the lending rules (KIM-VO). In other areas, on the other hand, employment continues to grow. The fundamental shortage of skilled labor is still there.
Short-time work debate “absurd”
From Neumayer’s point of view, a debate on short-time work can be avoided because of the weak economy, in the public sector such a debate is “absurd” at all. “We must value performance,” the industry representative called once again for the implementation of long-standing demands, such as tax credits for overtime pay and treats for people who continue to work after reaching the standard retirement age.
In the current situation, it is “mainly about reducing uncertainty”, which in addition to the working time debate is also fueled by the discussion about new taxes, according to Neumayer. Companies were concerned about the impending additional costs. In addition, less bureaucracy is needed – to realize the energy transition faster and at the same time boost the economy thanks to investments in it.
High energy prices are a burden for companies
“Energy prices, which are still too high, continue to burden our companies,” said Tyrolean IV president Christoph Swarovski. “A solution must be found here that will restore competitiveness vis-à-vis our neighbours.” The chairman of the Tyrolean Industry Federation criticized the fact that the industry is still waiting for the application for the energy cost subsidy II to finally be possible.
No impulse to be expected from the world economy
No impulse is expected from the world economy and growth is also weak here. The euro has also appreciated by 9 percent against the dollar in one year, which does not provide any extra support for exports. According to the research, prices of industrial goods will fall in the coming months. All in all, this should slow inflation only slightly. Prices for services continue to rise.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
