Economic barometer:

No improvement in sight far and wide

The mood in Vorarlberg's industrial companies is currently very gloomy.

(Bild: Stiplovsek Dietmar)

The business climate index for industry in Vorarlberg remains in negative territory for the tenth quarter in a row. Business representatives now see a challenge for politicians - at all levels.  

The economic crisis in Vorarlberg has deepened. On Wednesday, the Chamber of Commerce and the Federation of Austrian Industries presented the latest economic survey for the 4th quarter of 2024 - and it paints a partly dramatic picture: although the business climate index has risen slightly from -9.4 to -9.0 percentage points, there are no signs of a recovery. On the contrary: according to Vorarlberg's industrial companies, the lean period is likely to continue for months to come. The details of the survey show just how worrying the situation is: only eleven percent of Vorarlberg's industrial companies rate their current business situation as good. For 16 percent, it is poor. Almost half of the companies (46%) rate foreign orders as poor. Nevertheless, 23 percent consider them to be good.

Deindustrialization, i.e. the relocation of domestic production abroad, has long since begun and is a gradual process. Our companies must be sustainably profitable and make a profit. Otherwise jobs and locations will be lost in Vorarlberg.

Markus Comploj, Spartenobmann der Industrie in der Wirtschaftskammer

Bild: Mathis Fotografie

However, orders in general are continuing to fall, from a balance of -29 in the previous quarter to -31 percentage points at present. Nevertheless, the current earnings situation appears to have improved, with the balance rising from -47 to -7 percentage points. However, this indicator is not a glimmer of hope, especially as the forecasts are downright dramatic: 49% of companies expect their earnings situation to be worse again in six months' time. As a result, the relevant balance deteriorated from -7 to -37 percentage points. When asked about the general business situation in six months' time, 85% of companies stated that they expected turnover to remain unchanged. 15 percent fear a further deterioration, not a single company expects an improvement!

Deindustrialization is already a fact
There are vague hopes that the economy might not pick up again until the beginning of 2026. In view of these gloomy forecasts, Markus Comploj, head of the industry division at the Vorarlberg Chamber of Commerce, is already ringing alarm bells: "Deindustrialization, i.e. the relocation of domestic production abroad, has long since begun and is a gradual process. Our companies must be sustainably profitable and make a profit. Otherwise jobs and locations will be lost." Although companies are doing everything they can to retain employees, this is becoming increasingly difficult. This makes it all the more urgent for politicians to finally get into gear and do their homework - at all levels, from the EU to the municipalities. In addition to the already well-known demands - reducing bureaucracy, lowering non-wage labour costs, tax incentives for those who earn more, an efficient administrative apparatus and investments in digitalization, research and a modern infrastructure - Comploj also believes that employee representatives have a duty: "Anyone who believes that they have to make excessive demands during collective bargaining negotiations in this extremely tense situation has not understood how alarming the situation is."

Companies are under enormous cost pressure
A look at the machine and metal industry, which is so important for Vorarlberg and is already suffering the most from the recessionary phase - and which could be hit even harder - shows just how badly the competitiveness of local companies is at risk. In this sector, as many as 76 percent of companies expect the earnings situation to deteriorate further. The reason for this is not least the pessimistic expectations regarding sales prices. For 70% of the companies surveyed, these will continue to fall over the next three months. "The dramatic figures show the enormous cost pressure and the need for cost-cutting programs in order to become competitive again," emphasizes Michael Amann, Managing Director of the Industry Division of the Vorarlberg Chamber of Commerce.