The chairman of the trade association is sounding the alarm: the company location is at a turning point and urgent measures are needed to strengthen it, Georg Knill said in the ORF press hour on Sunday. “We are in a real recession.”
It is the strongest real economic decline since 1951, apart from the financial crisis and the corona crisis, Knill said. There can no longer be a ‘mild recession’.
High KV degrees, energy costs and bureaucratic obstacles
With 60 percent exports, Austria is an export country that has to compete with India, China and other countries. Due to the recent KV agreements, high energy costs and bureaucratic obstacles, the country is losing its attractiveness as an industrial location. In the rankings of the Swiss business school IMD, Austria recently dropped to 24th place out of 54 countries – previously it was already in eleventh place.
The current economic forecast from Wifo and IHS:
The manufacturing industry in particular is suffering from the current situation: the economy as a whole has recorded a decline of 0.8 percent this year, while the manufacturing industry – responsible for a quarter of employment and value creation – has recorded no less than three percent. Stagnation is expected before 2024.
Emigration abroad is already taking place
The latest wage agreements would increase unit costs by 11.5 percent this year and 7.9 percent in 2024. These increases would result in a large number of companies posting losses next year, Knill said. The relocation of domestic industry abroad is already taking place and is a “symptom of a gradual development at national and European level over the years”.
Recipes: less taxes, labor costs, faster approvals
The IV chairman proposed a number of measures to make the location more attractive again. This includes reducing tax and premium rates, reducing additional labor costs, suspending the CO2 tax and accelerating approval processes. “If we want to decarbonize, we need electricity and hydrogen pipelines. But politicians are not willing to approve these procedures on an accelerated basis,” Knill complained.
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.
