Industrial activity in Flemish Brabant is expected to contract this year, as high energy prices, labour shortages and government-mandated wage indexations threaten the prosperity of one of Belgium's richest provinces.
According to a survey carried out by Voka, the largest Flemish employers' federation, industrial companies based in the Dutch-speaking province expect their revenue to decrease by 4% this year.
The study also forecast that industrial activity will decline much more rapidly than the rest of the province's economy, which is expected to contract by 0.2% this year.
In addition, the survey found that four in ten companies in Flemish Brabant will scale down investment projects over the next two years, while a third of industrial exporters believe their revenues will shrink over the next 12 months.
"In addition to an energy and wage handicap, companies also face an unprecedented shortage in the labour market," said Kris Claes, Voka's Managing Director for Flemish Brabant. "There is an urgent need for measures to safeguard our competitiveness and an industrial policy must be developed, both at the Flemish and the European level."
'Additional support' required
To address the province's declining competitiveness, Voka called for a "tempering" of wage indexations and exhorted Belgium's regional and federal governments to provide "additional support measures" to allow Flemish industry to "compete on equal terms" with other businesses.
Among the most controversial of Voka's proposals, however, was its call for Belgium's governments to scale back their "unattainable" environmental targets, which Voka claims inhibit growth.
"Our region owes a great deal of employment and prosperity to successful industrial companies," Claes noted. "Under no circumstances should we put that at risk."
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The Voka survey is not the first time that Belgium's industrial sector has warned of the dangers facing the country's economy in recent months. Earlier this year, the CEO of Etex, a major Belgian construction company headquartered in Flemish Brabant, warned that Belgium and indeed much of the rest of Europe face a "real risk of deindustrialisation" over the coming months due to soaring energy costs and protectionist legislation recently passed by the US.
"For several months, the energy-consuming industrial groups that have the choice have been reducing their activity in Europe to produce elsewhere," said Etex CEO Bernard Delvaux.
"It is more as a citizen than as the boss of Etex that I want to sound the alarm. We are facing a real risk for the industry in Europe," he added.
