The metalworking industry recorded a ten percent decline in production in the first half of 2024. Around 50 percent of the 1,200 member companies expect a negative operating result this year. Incoming orders fell by 4.1 percent after adjusting for price changes, and around 4,000 jobs were cut, according to the Metalworking Industry Association (FMTI), which took stock on Thursday. Every second company has made lasting staff cuts.
According to FMTI chairman Christian Knill, there is no improvement in sight for the second half of the year. Production is expected to fall by nine percent. More than 5,000 jobs have been created abroad in the past six months. According to a survey, 50 percent of companies are considering relocating abroad if possible. 85 percent of companies are family-owned.
No growth since 2009
According to Knill, there has been no growth in the industry since 2009. Recently, there has even been a shrinking process: “We are in the middle of a recession.” The decline in orders, exacerbated by rising unit labor costs and high energy prices, is putting pressure on margins. Here, the industry is paying the price for inflation, which is above average compared to the EU, as this is traditionally compensated for in Austria during collective bargaining negotiations.
According to FMTI, wages in Austria have risen more than twice as much as in the EU and three times as much as in Germany. Labor costs are 22 percent above the Eurozone average. Personnel costs rose by 7.6 percent to 10.5 billion euros last year. Traditionally, the metalworkers ring in the autumn wage negotiations, but this year there will be no major haggling: the social partners agreed on a two-year contract last year. The GPA union criticized Knill’s statements that the wage and salary increases were a result of exorbitant inflation.
ePaper
Austrian Metalworking Industry in Crisis: Production Plummets 10% in 2024
The metalworking industry in Austria has suffered a devastating blow, with production plummeting by 10% in the first half of 2024. According to the Metalworking Industry Association (FMTI), this decline is a stark reminder of the industry’s struggles, with around 50% of its 1,200 member companies expecting a negative operating result this year.
Incoming orders have also taken a hit, falling by 4.1% after adjusting for price changes. This has led to a loss of around 4,000 jobs, with every second company making lasting staff cuts. The outlook for the second half of the year is equally bleak, with production expected to fall by a further 9%.
No Growth since 2009
The metalworking industry has struggled to grow since 2009, with the current situation being described as a recession by FMTI chairman Christian Knill. The decline in orders, coupled with rising unit labor costs and high energy prices, is putting significant pressure on profit margins. Austria’s above-average inflation rates, traditionally compensated for during collective bargaining negotiations, are also taking their toll on the industry.
Labor Costs: A Major Burden
Labor costs in Austria have risen more than twice as much as in the EU and three times as much as in Germany. According to FMTI, labor costs are 22% above the Eurozone average, with personnel costs rising by 7.6% to 10.5 billion euros last year. While the social partners agreed on a two-year contract last year, this year’s autumn wage negotiations are expected to be less contentious.
Industry Exodus: A Growing Concern
The struggles faced by the metalworking industry have led to a growing trend of companies relocating abroad. In the past six months, over 5,000 jobs have been created abroad, with 50% of companies considering relocation if possible. This exodus is a major concern, as it not only leads to job losses but also erodes the industry’s competitiveness.
Family-Owned Businesses Hit Hard
The metalworking industry is dominated by family-owned businesses, with 85% of companies falling into this category. These businesses are often more vulnerable to economic downturns, making the current situation even more challenging for them.
Conclusion
The Austrian metalworking industry is facing unprecedented challenges, with production declines, job losses, and rising labor costs taking their toll. To remain competitive, the industry must find ways to address these issues, including the high labor costs and energy prices that are stifling growth. Only by working together can the industry hope to recover and return to its former glory.
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Metalworking industry
Austria
Production decline
Job losses
Labor costs
Energy prices
Inflation
EU average
Family-owned businesses
Industry exodus
* Competitiveness
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The Austrian metalworking industry is in crisis, with production plummeting 10% in 2024. Rising labor costs, high energy prices, and above-average inflation rates are taking their toll on the industry. Read more to find out what this means for the industry’s future.
