Austrian Paper Industry Slumps as Eurozone Wage Growth Eases Toward 2.6% in 2026
Published on 06/17/2026 at 14:45 | Redaktion boerse-global.de
While the European Central Bank reports that pay rises across the currency bloc are cooling, one sector is already feeling the pinch from years of surging labour costs. Austria’s paper processors — represented by the industry group PROPAK — warned Monday that their competitive position has eroded sharply.
A study by the Austrian research institute EcoAustria found that unit labour costs in the country’s paper sector jumped 37 percent between 2017 and 2025. That compares with a eurozone average of 27 percent. Productivity in Austria’s paper industry rose just 4 percent over the same period, while Poland posted a 25 percent gain. The consequence: the market share of Austrian paper processors in Germany fell from 10.3 percent in 2017 to 8 percent in 2024, and the industry expects at best flat growth in 2026.
The broader wage picture, however, suggests that the cost pressure that has driven such regional divergence is gradually fading. On Wednesday, the ECB published its updated Wage Tracker, which confirmed earlier estimates from May. Wage growth across the eurozone stood at 4.8 percent in 2024 but is projected to slow to 3.0 percent in 2025. For 2026, the central bank forecasts a further decline to 2.6 percent. Economists read this as a sign of stabilisation, particularly because labour costs have been a key driver of inflation, especially in services.
The detailed breakdown shows a mix of dynamics. Negotiated wages — when smoothed for one-off payments — are expected to rise 3.2 percent in 2025, then drop to 2.3 percent in 2026. Without smoothing, the figures are 3.0 percent for this year and 2.6 percent for next. Total compensation per employee across the eurozone is seen increasing 3.2 percent in 2026.
The ECB is not letting its guard down despite the softening trend. Chief economist Philip Lane said Tuesday that the central bank will keep fighting inflation proactively. The main refinancing rate currently sits at 2.25 percent. Inflation stood at 3.2 percent in May, well above the ECB’s 2.0 percent medium-term target. The institution’s baseline scenario sees inflation falling to 3.0 percent in 2026, 2.3 percent in 2027, and finally hitting 2.0 percent in 2028. Governing council member Gediminas Šimkus stated Wednesday that he expects at least one more rate rise, noting that while energy prices have dropped following a US-Iran agreement, they remain above pre-war levels.
Eurostat added fresh data on Tuesday. Hourly labour costs in the eurozone rose 3.2 percent year-on-year in the first quarter of 2026, and 3.6 percent across the entire EU. Wages and salaries alone increased 3.4 percent in the currency bloc, while non-wage costs climbed 2.9 percent. The differences between member states are stark: Hungary posted the strongest growth at 16.4 percent, while Malta (1.3 percent) and France (1.8 percent) sat at the bottom.
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