Chamber boss alarmed

More and more companies are moving away from Austria

(Bild: APA/Hans Klaus Techt)

Expensive energy, high labor costs, extreme bureaucracy and a heavy tax burden are putting Europe, and therefore Austria, under increasing pressure as a business location. As a result, four out of ten domestic industrial companies are already relocating their production abroad. "The situation is extremely worrying," warns Chamber of Commerce President Harald Mahrer, who sees an urgent need for action.

"Europe and also Austria have a substantial problem in maintaining their competitiveness," continues the head of the Chamber. This is also underpinned by the latest results of a Deloitte study. Three quarters of entrepreneurs already see the danger of deindustrialization. In Germany, two out of three industrial companies have relocated their production or parts of it abroad in the last three years.

(Bild: APA/Hans Klaus Techt)

According to Mahrer, Austria is "lagging around two years behind". However, the train is also picking up speed here. In the last three years, 41 percent of our companies have already relocated parts of the value chain to other countries. This will also accelerate because many of our companies are heavily dependent on German industry.

Harald Mahrer, WKO: "Something must be done as quickly as possible."

(Bild: Martin Jöchl)

Cost-intensive sectors hit hard
Cost-intensive sectors have a particularly high tendency to migrate. At the top of the list is parts production, where 40 percent have already relocated or are planning to do so. This is followed by production companies in general (38 percent), pre-assembly (32 percent), final assembly (24 percent) and warehousing (20 percent).

North America and Asia increasingly attractive
In the past, eight out of ten companies chose other countries in Europe as their location, but now Asia (e.g. Vietnam, Malaysia, South Korea) and the USA are becoming increasingly important. "Asia and the USA are taking advantage of Europe's weakness to attract investment," emphasizes Mahrer.

Where the problems lie
There are many reasons why Austria is becoming increasingly unattractive. However, almost eight out of ten companies cite high labor costs as the main reason for relocating. A genuine reduction in non-wage labor costs is therefore urgently needed. For two out of three, this is immediately followed by the excessive bureaucracy (reporting and control obligations, sustainability reports, etc.) that Austria and the EU impose on companies. Even consultants no longer know their way around, according to the head of the WKO, who questions the usefulness of some regulations.

Energy price, workforce and taxes of key importance
Energy security and costs are also of central importance for 61 percent of industrial companies. 63 percent criticize the issue of taxes and duties and 64 percent the availability of labor.

Those who work in retirement should receive gross for net
For these reasons, a clear location strategy is needed for Austria. In addition to reducing non-wage labor costs, Mahrer can also imagine a tax exemption for those people who are still working after reaching the standard retirement age. Their gross salary should then be paid out net. The employer "only" pays accident insurance. "Why should I pay health insurance twice?" says Mahrer. This could keep tens of thousands of (experienced) employees in the workforce. The taxation of full-time and part-time work should also be changed. Mahrer: "Those who work full-time should not be the ones to lose out."

A tax exemption could possibly keep more older employees in work, even if they have reached the standard retirement age.

(Bild: SerPak - stock.adobe.com)

However, "secure" prices should also be ensured for energy. Predictability and prices are in some cases significantly better in other countries. And the "bureaucracy monster", which is currently on the loose, urgently needs to be reined in.