Upper Austria’s industrial companies fear an abrupt end to the boom. This was the result of a survey by the Federation of Austrian Industries (IV) in 91 companies with a total of 108,500 employees in the first quarter of 2022.
Most industrial companies currently have full order books. The balance of positive and negative reports from the industry is higher than ever. However, there are increasing signs that a “poison cocktail” is being mixed in the global economy and that the numbers are dramatically turning negative. In six months, hardly any company would expect anything positive.
The reason for this is the severe lockdowns in China caused by Corona with the consequences for the supply chains, the high costs of energy and primary materials and the shortage of workers in Austria would have a massive impact on profits and earnings opportunities. The war in Ukraine would add to this.
Early-cycle sectors in particular, which notice economic changes earlier than others, are very pessimistic about the situation in six months. These are the metal, paper, machine and vehicle industries, but also the construction industry, i.e. sectors that are strongly represented in Upper Austria. “Medium-term planning has become impossible. The companies find it difficult to assess the development of the coming months and are acting in a thick fog,” says IV Managing Director Joachim Haindl-Grutsch. The focus is on day-to-day supply chain management. This is where resilience needs to be increased.
The industry also sees domestic politics as having a duty. Inflation and high energy costs are a massive threat to the industry, says Haindl-Grutsch. The abolition of cold progression, electricity price compensation via tax credits and the reduction of non-wage labor costs are important measures that must be implemented immediately. “Now the government has to prove its ability to act.”
Source: Nachrichten
