Thanks to a two-year agreement, the metalworking industry will be spared from tough commercial negotiations this year. At the same time, the number of employees is decreasing. This year, 8,500 employees will probably be affected and lose their jobs. Every second company is in the red.
“The recession in our sector has deepened,” says Christian Knill, chairman of the metal technology industry. In the first half of the year, production fell by ten percent. Incoming orders also fell again, after having already collapsed by 18 percent in 2023. A third of metal technology companies also work as suppliers to the automotive industry. The crisis that is hitting German car manufacturers is having enormous consequences.
In the first half of the year alone, 4,000 employees were affected
Due to the bad situation, more and more companies are tightening the screws on personnel costs and cutting jobs significantly. In the first half of the year alone, 2,000 employees lost their jobs, as well as 2,000 temporary workers. At the same time, companies abroad created more than 5,000 jobs. We expect up to 8,500 job losses by the end of the year. Knill emphasizes that “personnel measures do not happen overnight.” Some things will only become visible in the course of the year.
Personnel costs are galloping away
“The high personnel costs are a huge competitive disadvantage for Austria. The collective wages are galloping away compared to other European countries,” Knill emphasizes. In the past fifteen years, labor costs in this country have increased by almost 60 percent, while the average in the eurozone was “only” 41.7 percent. In Austria, wages rose more than twice as much as in the EU last year and three times as much as in Germany. The value of the increase is around 8.9 percent in Austria and 2.9 percent in Germany. In addition to the high wage costs, Knill sees bureaucracy as the biggest brake on growth.
In view of the upcoming elections, the sector is therefore in favor of a 25 percent reduction in bureaucracy. They are also in favor of lower indirect labor costs and an increase in the investment deduction. This should increase to 15 percent for everyone.
There are no heavy KV negotiations this year
The next autumn wage rounds traditionally take place in the autumn, but this year there will be no hard competition for new commercial contracts. In 2023, an increase in wages and salaries by rolling inflation plus one percent was agreed for this year, which will probably amount to just under five percent this year.
With a “competition and job security clause,” companies in particular difficulties can get an exception that allows them to get a smaller pay rise. “There will be more companies this year because the figures are even worse,” says Knill. About 30 percent want to use this clause. Last year, about one in ten companies used the clause and paid less. In general, the industry representative is in favor of continuing to rely on two-year diplomas in the future, because they offer more planning security.
Although there has been a slight recovery in the sector recently, entrepreneurs in the metal industry are not very optimistic: according to the survey, about 80 percent consider an improvement in the second half of the year unlikely. The expectation is that production will fall by nine percent compared to the previous year. “We do not see any recovery,” Knill regrets.
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.
