Austrian Electronics Industry Faces Tough Year Ahead

Austrian Electronics Industry Faces Tough Year Ahead

Image: APA/dpa/Bernd Weißbrod

 

Austria’s electrical and electronics industry is preparing for a challenging year following a difficult 2023, with orders down 4.8% compared to the previous year and a staggering 11% drop reported in May 2024, warned industry officials.

“It’s not easy to recover from that. When a customer is lost and needs to be won back, it eats into the margins,” said Wolfgang Hesoun, chairman of the electrical and electronics industry association and former CEO of Siemens Austria.

The export rate has also declined to 83.9%, highlighting the industry’s struggles. High energy costs have significantly weakened the sector’s international competitiveness, leading to a drop in orders and diminished investment capacity. Hesoun complained that political inaction regarding rising energy prices has made the crisis worse.

The ongoing issues facing German car manufacturers have yet to fully impact the domestic supply chain, but Hesoun noted early signs of trouble. He expressed concern that Austria and Europe are failing to adopt a systemic approach to challenges in electromobility and the promotion of photovoltaic systems, where infrastructure development has not kept pace with innovative ideas.

High wage agreements in 2023, a response to rising inflation, have further strained the industry. While the electrical and electronics sector increased its core workforce by 3.5% to 74,291 employees, nearly 30% of temporary positions were cut. Despite this, Hesoun stated, “At the end of the day, a company has to be profitable. If that’s not possible, jobs will be relocated or cut.”

Trade unions PRO-GE and GPA have countered some of Hesoun’s comments, with union leaders Karl Dürtscher and Reinhold Binder asserting, “The workers didn’t cause the inflation, but they suffered greatly from it.” They urged for measures to prevent another energy price shock and called for investment in energy infrastructure.

Despite these economic challenges, the industry faces a looming skilled labour shortage, with estimates predicting a shortfall of around 22,000 trained professionals by 2030. However, the increase in apprenticeships in the electrical sector offers some optimism; in September 2023, there were 1,263 apprentices, rising to 1,343 a year later – a 6% increase.

Looking ahead, the electrical and electronics industry is urging the next federal government to prioritise restoring competitiveness. Key demands include reducing ancillary wage costs, cutting bureaucratic red tape, providing sustainable subsidies, and investing in infrastructure. Hesoun emphasised the need to accelerate decarbonisation and digitalisation efforts while ensuring technology neutrality and enhancing the focus on cybersecurity.

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