Political decisions and their economic consequences

QU 1 2024 – Review and Perspectives

Metalworking companies in Europe face a multitude of challenges that need to be overcome. In times of ongoing global crises, it is crucial to take a sharp look at the business landscape, especially in industries that are heavily affected by economic fluctuations.

All companies of the PREIS Group are suppliers to the construction industry, the mechanical engineering industry and energy distribution. These industries are pillars of the European economy and are closely linked to the basic needs of society. In this quarterly review, we take a closer look at developments in these sectors from the perspective of Peter Jägersberger, Managing Director of the PREIS Group.

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Construction, mechanical engineering and foundry – light at the end of the tunnel?

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The construction, mechanical engineering and foundry industries continue to face serious challenges. A decline in construction activity due to economic uncertainty and stagnant investment is having a negative impact on these sectors. Energy costs at a high level, rising wages and a shortage of skilled workers are further exacerbating the situation. Recruiting a skilled workforce remains a challenge. Uncertainty on the labour market and demographic change are currently leading to bottlenecks in the supply of labour.

“We are indeed experiencing a difficult time in these areas at the moment. Based on the assessment of the first quarter, we do not see any significant changes in these industries for 2024. However, there are first signs of positive developments for 2025. Interest rates are starting to fall, which will boost investment in the construction sector and have a positive impact on the engineering industry and thus our foundry customers. Investments in automation and modern technologies at the site in Croatia are already underway.

Companies that invest in automated manufacturing processes are better positioned to adapt and gain competitive advantage.” says Peter Jägersberger.

Boom in the field of transformers due to the energy transition!

In contrast, the energy industry, especially in the renewable energy sector, and thus transformer manufacturers, is experiencing significant growth. The increasing demand for clean energy and the expansion of the entire European energy distribution infrastructure are driving these industries, and companies operating in this field are benefiting from an increasing need for innovative energy generation and distribution solutions.

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“The ecological decisions of European politicians have created a boom in demand for components for energy distribution in this area. Geopolitical tensions and changing consumer trends are giving this development even more speed to accelerate the phase-out of fossil fuels.

In order to integrate renewable energy sources, to guarantee the flexibility and stability of the power grid in Europe and to enable energy transmission over long distances more efficiently, the PREIS Group produces transformer tanks for well-known transformer manufacturers at its sites in Slovenia and Bosnia. Here in Europe, we are experiencing a capacity bottleneck in order to meet the requirements of this energy transition. Hence the decision of the PREIS Group to expand production capacities at the Slovenian site and to make further investments here,” says Peter Jägersberger.

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Sustainable action and competitiveness – a balancing act for companies

“The importance of sustainability is undisputed. As a metalworking company with production sites in Europe, we face considerable challenges in complying with regulations and requirements in the area of sustainability and supply chains while remaining competitive. Despite environmental and social awareness of sustainability, bureaucratic hurdles can tie up considerable resources, cause costs and thus lead to serious competitive disadvantages. In Europe, we must ensure that bureaucracy does not weaken innovation in our companies. If a significant portion of resources has to be spent on compliance, there may be less room for innovative developments, investments in new technologies and business models that contribute to long-term sustainability.” explains the Managing Director of the PREIS Group.

The PREIS Group employs 820 people at 4 international locations and produces components for the mechanical engineering industry, the construction industry and for power distribution.

 

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