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The Annual Report of the Austrian Paper Industry

June 20, 2014

Contrary to expectations, decreased volume and sales made for a disappointing 2013

The years following the recession of 2009/09 have remained characterized by weak growth – Austria’s GDP increased by a mere 0.4 percent in 2013, with industrial production rising by only 0.8 percent. Even so, these figures were above average compared with the stagnant economy of Europe, and by the year’s end, Austria’s unemployment rate had only risen to 4.6 percent (EU: 10.8%). The ATX made light gains during 2013 to close the year at 2,550 points, still clearly below its all-time high of 4,980 in 2007. Strong growth, on the other hand, was exhibited by the DAX (+25%) and – due to the loose US monetary policy – by the Dow Jones (+26%). Despite looming multi-billion Euro losses in connection with the collapse of Hypo Alpe-Adria-Bank, the US ratings agencies Moody’s and Fitch stood by their AAA rating for Austria.

In this economic environment, paper industry output in Austria sank by 3.3 percent, with machine capacity usage falling to around 90 percent. Amid the weak economic growth of 2013, Austrian paper usage stagnated (+0.1%), with decreases seen in in the higher-value segments of graphic and packaging paper. Sustained high manufacturing costs weighed on the various companies’ bottom lines, with average revenue falling below 700 Euros per ton of paper.

Ensuring an adequate supply of wood for the pulp factories in Austria was an urgent problem for the industry, since subsidies provided under the Green Electricity Act entailed more and more wood being burned in more or less efficient power plants. The consequences were rising imports and higher raw materials costs. The commensurately thorough cost management has led to layoffs at several companies during 2013/14.

To read the entire report, click here [pdf, 1,630.5kb].