There is a threat of layoffs – industry is struggling with a poor order situation

There is still no end to the economic downturn in sight, and the mood in the industry is correspondingly poor. If the situation does not improve soon, there will be a risk of layoffs.

The economic crisis is not only a reality, it also threatens to become increasingly entrenched. The current economic survey by the Vorarlberg Chamber of Commerce for the first quarter of the current year also bears witness to this: According to this, the business climate index – i.e. the average of the current business situation and the assessment of the business situation in six months – is still clearly in negative territory with a minus of 7.9 points . A positive value was last determined one and a half years ago. Michael Amann, managing director of the industry division in the Vorarlberg Chamber of Commerce, doesn’t even try to sugarcoat the situation: “The situation in Vorarlberg’s industry remains precarious. Incoming orders are declining and the number of employees is under increasing pressure. Last but not least, companies are struggling with rapidly rising personnel costs.”Staff cuts are only a matter of time. In fact, the details of the current economic barometer give little reason for hope: around a third of companies (34 percent) speak of a currently poor business situation . Order backlogs have collapsed for 37 percent, and foreign business is currently poor for 32 percent. All Vorarlberg industrial companies surveyed as part of the current economic barometer complain about a collapse in orders. This could soon force companies to cut employees. What is particularly worrying is that when asked about the number of employees in three months, 35 percent of companies said that they expected the number of employees to decline. The current AMS figures confirm the unpleasant development on the labor market: at the end of March 2024, 9,590 people were registered as unemployed in Vorarlberg – an increase of 13.2 percent compared to the previous year. “Companies are trying to retain their skilled workers despite the lack of orders. However, it is becoming increasingly difficult to enforce the required prices for industrial products ‘Made in Vorarlberg’ on the international market, especially due to sharply increased costs,” reports Amann. The industry representative fears that the location is increasingly losing its competitiveness. In Austria, unit labor costs rose by 12 percent in 2023, while in our neighbors in Germany, which were also badly hit, it was only four percent. Tax cuts and reductions in bureaucracy. No wonder, then, that industry representatives see politicians in particular as responsible. The central demands are known: a significant reduction in the tax rate and the reduction of bureaucratic hurdles. It is extremely unlikely that the crisis will trigger itself on its own. In the current economic survey, just six percent of the rural businesses surveyed said that they expected the business situation to improve in the next six months. So times remain frosty.
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