Istvan Simon’s manufacturing facility in western Hungary churns out over a million plastic components per day; however, on a busy morning in one of its large manufacturing halls, there is only the sound of machines clicking and whirring.
Similar transformations are ongoing on production lines across the European Union’s eastern wing, as soaring wage bills undermine the region’s reputation as a cheap manufacturing base.
Plant owners from Hungary to the Czech Republic and Poland find themselves with little choice; however, to invest in the automation of their manufacturing processes if they need to stay competitive.
Manufacturing in the region has advanced since the EU expanded eastwards in the mid-2000s, with corporations such as auto manufacturers Audi and Daimler opening local assembly lines and spawning supplier ecosystems, but more recently sturdy economic progress has led to a shortage of staff and rising wages.
Whereas Hungary’s economy grew practically 5% in 2019 and manufacturing investments surged at the fastest pace in three years, the sector shed almost 23,000 jobs, ending a six-year run of annual employment growth.
Czech knowledge showed a yearly lack of almost a thousand manufacturing jobs in Q3 2019, suggesting employment in the industry might have slumped for the first time since 2013 over the entire year.