Tyrol – hard-hit by the pandemic but on the way back up

Christoph Swarovski, President of the Tyrolean Federation of Industries, and Christoph Walser, head of the Tyrol Economic Chamber, talk about “their” businesses and stand up for Tyrol.

Tyrol‘s economy started the second half of the year 2021 strongly. The recovery is visible but the cost of raw materials and a rise in infections remain a risk for autumn. The incidence figure dropped considerably in late spring, early summer, which in turn resulted in the economy going back up. After 15 months of recession there was a strong motion in Tyrol’s economy: The business climate index sprang from the deep red back into the black and is back at the levels before the pandemic.

Christoph Swarovski, President of the Tyrolean Federation of Industries, and Christoph Walser, head of the Tyrol Economic Chamber, can offer more details.

Mr Swarovski, Mr Walser – how are Tyrol’s businesses doing? Christoph Swarovski: Most of our members are doing well. But a lot of them are fighting with supply problems and the lack of skilled workers is still there. The huge price hikes in building materials can be absorbed in investment projects. Even though the atmosphere is good right now, we can’t deny the fact that the industrial sector has been hit hard. But we are used to dealing with changes and use our time to find solutions instead of complaining. Christoph Walser: Our companies are definitely doing better than only half a year ago. Our latest economic indicators show this. In the beginning of the year, the business climate index, that is the mean value between the current economic situation and expectations for the next six months, was at -4 percentage points. Now it went up +44 percentage points and has thus reached the levels of 2019. Optimism is back even though there are differences in the various sectors. 61 percent of businesses in the manufacturing sector are happy with their economic situation; in the services sector this figure drops to only 32 percent. The biggest challenge in the months and years to come will be the lack of skilled workers. 70 percent of businesses consider this their biggest problem for 2021/2022. Causes for headaches among entrepreneurs are also the increased labour costs (48 percent), supply chain problems (47 percent) and surging energy and raw materials prices (48 percent). This bears down on the

Christoph Swarovski: “In the long run, we won’t be able to afford to close down our entire economy with every virus that comes along.”

businesses’ earnings and makes prices go up for end customers. I hope that we will return to normality in these areas after initial struggles.

The number of vaccinations kept rising before the summer while the number of infections fell. We seem to have overcome the worst. But have we really? Is the crisis over? What do we need to look out for now? Swarovski: Nobody thought we’d have a second lockdown and then we ended up having three. So, nothing is set in stone in this pandemic. Therefore, we have to do everything we can to prevent a fourth lockdown – that means staying alert and adhering to the few rules that remain. But the most important thing is to better prepare for future crises. In the long run, we won’t be able to afford to close down our entire economy with every virus that comes along. Walser: The increasing number of vaccinations are majorly important. The vaccination days we hold in Tyrol – where anyone can come and get vaccinated without registering beforehand – have been a success and should continue. I don’t believe in compulsory vaccinations. I’m optimistic that we can reach the required vaccination ratio among the population through information campaigns. But, of course, we still need a healthy dose of personal responsibility to prevent infections from spreading. The virus is still here and we need to learn to live with it. But it is time to say goodbye to simply looking at the incidence rate - we need to look at several other factors, in particular hospital admissions.

We should always think positive – so what are the positive findings you are taking with you from the Covid crisis? Swarovski: It was definitely good to see that the economic sector – and in part also public services – is very flexible under pressure. We also saw that many business trips are not necessarily needed and that we can use our time better. That is going to stay with us and I think it’s a good thing.

Tyrol is working on a STEM strategy: The aim is to have more science, technology, engineering and mathematics in curriculums.

Walser: If you take a closer look, some positives from the Covid pandemic will remain: The disease showed those that are critical of capitalism how important healthy businesses are for the job market and thus our wealth. Furthermore, digitisation has received a massive boost over the last few months, which will help us in the years to come. And finally, the pandemic strengthened our commitment to Tyrol. The regional business cycle is an important factor to secure corporate success and jobs in the smallscale structures of our economy.

What is the Tyrolean Federation of Industries planning for next year? Swarovski: We are currently working on a STEM strategy for Tyrol with all the stakeholders. The aim is to have more science, technology, engineering and mathematics in curriculums. Ensuring the strategy’s implementation will be one of our major topics for 2022. Next year, we will also deal more intensively with the issues around the climate, energy, resources, cycle economy and sustainability. Our members will need support and networking, and we will take care of this.

And what is the Economic Chamber going to focus on in 2022? Walser: We have drawn up the “Restart Programme” and are in talks with political decision-makers. We need arrangements on a federal and a provincial level to restart our economy in a sustainable way. This includes extending support schemes of those sectors that have been particularly hard-hit by the pandemic but also measures to fight the lack of skilled workers, tax reliefs, reducing red tape and setting up the “Tyrol Fund”. This is a concept where private individuals hold a stake in a company to raise its own capital ratio. This strengthens businesses and secures jobs. We suggest that the Province of Tyrol assumes contingent liability for this. Digitisation and sustainability are also things the Tyrolean Economic Chamber will focus on – we will offer our members a number of different consultancies and support. ◆