Austrian companies are changing course: investments are shifting abroad!

Austrian companies are changing course: investments are shifting abroad!

The Austrian industrial sector is confronted with ongoing competitive pressure, which significantly influences the investment decisions of large companies. According to a report by South Tyrol News Many companies are planning to spend only 18 percent of their capital expenditure in Austria over the next five years. The vast majority of these investments will be directed abroad, with 30 percent going to Asia and 20 percent to Eastern Europe.

The reasons for this shift are diverse: lower labor costs, reduced bureaucracy and attractive local subsidies are just some of the factors that are encouraging companies to relocate their production facilities to cheaper countries. This also affects the USA, where 15 percent of future investments are expected to come from Austria, while 13 percent are expected to flow to Western and Southern Europe.

Long-term strategies despite tariff threats

Despite the tariff threats from the USA, Austrian companies remain unimpressed in their long-term strategies. The survey of 89 board and management members of large companies showed that 80 percent of those surveyed have an annual turnover of more than 100 million euros and are primarily active in production. These companies have so far been able to cushion sales declines caused by US tariff policy by passing on higher prices to their customers. The market potential in the USA as well as more stable supply chains and the Inflation Reduction Act offer significant incentives for investments in American production facilities.

Companies that have been operating in the USA for a long time seem to particularly benefit from this development. They see this region not only as an opportunity to diversify their markets, but also as an opportunity to optimize their cost structures. In addition to the regionalization of value creation, which aims to locate production close to the sales regions, issues such as cybersecurity, research and development and sustainable practices are also high on the strategic agenda.

Current challenges in the industry

The Austrian export economy achieved goods exports of 200 billion euros last year, but some companies are still facing serious challenges. Loud The standard High wage agreements and expensive energy continue to be exposed to massive burdens that have a negative impact on competitiveness. This is causing a setback in the export sector, as many industrial companies are feeling massive pressure to relocate their production facilities in order to be able to work more cost-efficiently.

Companies like KTM are even facing the risk of bankruptcy, underlining the tense situation in the industry. The Oesterreichische Steuerbank (OeKB) has acknowledged the concerns of industry representatives and is offering support for exports and foreign investments, putting additional pressure on companies to adapt their strategies.