Study: Key Challenges and the International Competitive Landscape for Industrial Manufacturers of Paper and Cardboard Products in Austria
Study: Industrial Manufacturing of Paper and Cardboard Products (PROPAK)
Mag. Dr. Wolfgang Schwarzbauer
Chief Financial Officer and Chief Human Resources Officer, Head of Regional Economic Policy and Foreign Trade Research
Austrian manufacturers of paper and cardboard products are facing increasing pressure. A study conducted by EcoAustria on behalf of the Trade Association of Industrial Manufacturers of Paper and Cardboard Products (PROPAK) examines the key challenges facing the industry as well as its international competitive position. The results show that, despite high levels of innovation, significant sustainability advantages, and a strong focus on exports, competitive conditions in Austria are deteriorating.
The PROPAK industry comprises approximately 83 manufacturing facilities with about 8,400 employees and a production value of around 2.2 billion euros. With an export ratio of about 78 percent, the industry is heavily dependent on international markets — making the erosion of market shares abroad, as evidenced in key export destinations, a particularly pressing concern. At the same time, it generally benefits from long-term trends such as the increasing substitution of plastic packaging with paper and cardboard solutions.
The study identifies the trend in labor costs as the greatest challenge. Since 2017, Austrian unit labor costs have risen by about 37 percent—a significantly steeper increase than in the eurozone or in key competitor countries such as France. Even within the industry, the increase in collectively bargained wages in Austria was significantly higher than in Germany, for example. This trend is particularly burdensome for those segments characterized by low margins and a high share of labor costs.
In addition to costs, regulatory requirements pose an additional burden. The companies surveyed are particularly critical of national “gold plating” in the implementation of European requirements, lengthy approval processes, and the administrative burden of new regulations.
A quantitative analysis of trade data also shows that, despite rising export values, Austria is losing market share in many key export markets. This is particularly evident in Germany, Austria's most important export market, where the combined market share of Austrian suppliers declined from 10.3 to 8.0 percent between 2017 and 2024. At the same time, countries such as Poland and China are becoming increasingly important. Poland is benefiting from significantly higher productivity gains and lower cost structures.
Based on these findings, the study derives several recommendations for economic policy. These include more stringent limits on cost increases, a reduction in non-wage labor costs, more flexible working time and side-income regulations, faster approval procedures, the consistent avoidance of “gold plating,” and investments in digitalization and productivity-enhancing measures. The goal is to sustainably strengthen the competitiveness of a key export-oriented industry.
