Salzburg – the industrial sector became the saviour

Peter Unterkofler, President of the Salzburg Federation of Industries, speaks about the good atmosphere in Salzburg and his fear of a possible inflationary spiral.

Being a province of tourism and culture, Salzburg had been hit particularly hard by the Covid pandemic with the closures of the hospitality sector and cultural facilities. The regional gross domestic product fell by seven percent, which was much higher than the Austrian average of 6.3 percent. A fairly robust boom in the industrial and the construction sector with a subpar decrease in production prevented a bigger slump.

A robust material goods industry and a positive development of corporate service in its wake will ensure that Salzburg’s regional economy will be back on a path of growth this year with an increase of two percent this year, says UniCredit Bank Austria Research. It is not presumptuous to say that Salzburg’s industrial sector helped Salzburg as a business location out of the economic doldrums.

Peter Unterkofler, President of the Salzburg Federation of Austrian Industries, knows more about the industrial firms in the province.

How are Salzburg’s businesses doing? Overall, Salzburg’s industrial firms overcame the Covid crisis quite well compared to other sectors. The last 15 months showed our national economy how important an export-oriented and well-oiled industrial sector is. We worked hard together for the current economic upswing. We can be proud that the industrial sector acted as an engine for the entire economy even during a crisis. Many companies benefitted from the investment bonus.

An economic survey has hardly ever before yielded such positive results as our latest one. In the months to come many sectors and companies will continue to face a scarcity of resources – just like the corresponding price hikes and supply difficulties, and the lack of skilled workers that we have been experiencing for years. The markets are in large parts overheated.

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? The industrial firms kept working throughout the entire Covid crisis and their in-house vaccination centres made a valuable contribution in fighting the pandemic. We hope that we are out of the woods and are happy about the psychological element of the currently good atmosphere. We are still not back at the pre-Covid levels of 2019, but we are going to get there in 2022.

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Peter Unterkofler, President of the Salzburg Federation of Industries: “Without digitisation, many businesses would have not survived the pandemic.”

We seem to have overcome the pandemic from an economic point of view in the industrial sector, but we still need to bring other sectors such as hospitality back to the previous level. But the virus hasn’t simply disappeared, it will stay with us in the future. Therefore, it is of utmost importance to have a high vaccination rate and a high willingness to get vaccinated despite low R-rates.

In terms of the national economy, it is important to not trigger an inflationary spiral – right now, Austria has one of the highest inflation rates in Europe. This is reflected by the prices in retail, hospitality and rents – and the higher prices favour inflation, in turn.

We all should always think positive – so what are the positive findings you are taking with you from the Covid crisis? Without digitisation, many businesses would have not survived the pandemic – think of working from home and distance learning. 57 percent of companies could manage the Covid crisis better with it. The increased digitisation actually creates more jobs. More flexibility, for example thanks to video meetings and fewer business trips, lead to a reduction of costs and carbon emissions. Desk sharing will surely lead to reduced costs when furnishing workstations in companies.

The Covid pandemic proved the Salzburg Federation of Industries’ focus on digitisation and education, particularly in the STEM subjects, to be absolutely spot on.

And what is the Salzburg Federation of Industries planning for next year? We are clearly focusing on fighting the lack of skilled workers, promoting education and generally boosting our business location in terms of investments, digitisation and infrastructure.

We generally believe it is important to promote innovation. The industrial sector needs to have its competitiveness safeguarded, research promotion and innovation leadership. We are in a great shape for topics of the future such as digitisation, new technologies, energy and mobility transition, green technologies and life sciences. Other things that will occupy us in future to a great extent are carbon neutrality, the question of who is going to pay for the Covid crisis and where future growth will be coming from. ◆