Apprenticeship funding cut: This affects every second bakery and confectionery business

At the quarterly press conference on July 8, 2026, Manfred Denk, Chairman of the Federal Division of Trade and Crafts at the Austrian Federal Economic Chamber (WKÖ), and Christina Enichlmair from KMU Forschung Austria presented the latest economic analysis for trade and crafts. In addition to objective economic figures, the focus was primarily on a topic directly affecting training companies: the new regulations for basic funding for apprentices.

The economy is stagnating.

The hopes for an economic upswing, which were still emerging at the beginning of 2026, have been dashed. The Middle East conflict, high energy prices, and rising inflation have slowed the positive development. "The current economic data unfortunately confirms what many of our businesses are experiencing on a daily basis. We're not making any progress," said Denk.

Specifically, according to KMU Forschung Austria, this means that the situation for bakers and confectioners is more nuanced than the industry average. Bakers' sales fell by 0.4 percent nominally in the first quarter of 2026, and by 2.7 percent in real terms (after a price increase of 2.4 percent). 29 percent of businesses even saw an increase, while 36 percent experienced declines. The trend was more pronounced for confectioners : here, sales fell by 1.7 percent nominally and by 4.5 percent in real terms, with only 13 percent of businesses reporting increases and 40 percent experiencing declines. While both sectors are performing better than the overall average for trade and crafts (nominal -2.1%, real -4.6%), the situation for bakers has even worsened slightly year-on-year (previous year: +1.5%), while the decline for confectioners has intensified compared to the previous year (previous year: -0.4%).

Business climate remains negative

The second quarter of 2026 also brought no change in the trend: 22 percent of businesses reported a good business situation, 30 percent a poor one, and 48 percent a typical seasonal situation. The balance was minus 8 percentage points, compared to minus 12 in the previous quarter – a slight improvement. "The situation is mixed, but overall without any discernible momentum. We are particularly feeling the effects of households' reluctance to spend in consumer-related sectors, while the necessary investment momentum is still lacking in the construction sector," Enichlmair explained, putting the figures into context.

Within consumer-related sectors – which include the food industry – not a single sector recorded a positive sales balance in the second quarter. However, some sectors did manage to improve compared to the previous year: automotive technology (balance -1 point, year-on-year +5), hairdressers (-6 points, +7), and mechatronics (-20 points, +8). The situation worsened, however, for pedicurists, beauticians, and massage therapists (-19 points, year-on-year -11), for personnel service providers and the security industry (-17 points, -3), and in arts and crafts (-10 points, -18).

The picture is mixed in the capital goods-related sectors: Order backlogs increased for stove fitters, tile layers, and ceramicists (+10.1%), in the construction industry (+8.0%), in the chemical industry and monument, facade, and building cleaning companies (+4.7%), and among metal technicians (+4.2%). In contrast, plastics processors (-15.3%), construction support services (-14.9%), and timber construction (-11.5%) suffered significant declines.

Expectations are becoming increasingly gloomy.

The outlook is also subdued: For the third quarter of 2026, only 16 percent of companies expect an improvement, 57 percent anticipate no change, and 27 percent expect a decline. The balance of expectations is therefore minus 11 percentage points – worse than in the previous quarter (-6), but roughly on par with the previous year. Capital goods-related sectors are significantly more pessimistic, with a balance of minus 15 points, compared to consumer goods-related sectors with minus 5 points.

“We cannot simply rely on the crises disappearing on their own. Austria and Europe must rediscover their strengths instead of constantly shackling themselves,” Denk appealed, citing greater energy independence as one of the key levers – from expanding renewables to green hydrogen and geothermal energy, to utilizing domestic gas reserves as a bridging technology. Businesses in the trades and crafts sector could benefit from this as “engines and practical implementers of the climate and energy transition.”

Bureaucracy: two steps forward, one and a half steps back

Denk acknowledged that the federal government had made some progress in reducing bureaucracy. However, he warned that this progress threatened to be undone elsewhere – for example, by the overly complicated VAT reduction for basic foodstuffs or the planned bureaucratic monstrosity surrounding the EU Wage Transparency Directive . "For every two steps forward, we take one and a half steps back. This self-imposed constraint must end if we want to move forward," Denk stated. He called for a swift, one-stop shop for building and permitting procedures to end the "bureaucratic ping-pong," and sees positive signs from Lower Austria: "Now the reform partnership is needed to deliver results quickly."

Denk described the reduction in non-wage labor costs, effective from 2028, as a "mood booster"—in his view, a major political success for the Chamber of Commerce. Trade and crafts, as the largest employer sector, are expected to benefit most, with around €400 million per year. "This is more than just a glimmer of hope on the horizon. We can certainly expect a boost in investment, employment, and growth from it."

Apprenticeship funding: Why the cuts are hitting many small businesses hard

For training companies – including bakeries and confectioneries – this year brings a significant change : For all apprenticeships ending on or after July 1, 2026, the basic subsidy will decrease to 75 percent of the previous calculation basis. Previously, the subsidy was calculated as three times the collectively agreed gross apprentice salary in the first year, two in the second, and one each in the third and fourth years. There is one exception: Each training company will continue to provide 100 percent of the previous subsidy per calendar year for one apprentice chosen by the company itself.

Denk's criticism focuses precisely on this point. "Nearly 50 percent of businesses only train one apprentice," he points out. Conversely, this means that more than half of all training businesses – including many smaller bakeries and confectioneries – will be affected by the cuts starting with their second apprentice, even though they are often already operating at the limit of their training capacity. Denk believes the wrong priorities are being set here.

The cut is made even more controversial by its timing in relation to a statement by AK President Renate Anderl, to which Denk reacted with incomprehension: "On the very day when state support for training companies is cut by a quarter, the talk of 'generous apprenticeship subsidies' is, in our view, difficult to understand."

"So who ensures that apprenticeships remain attractive to young people – and who tries to shirk their responsibility?"
— Manfred Denk, Chairman of the Federal Division of Trade and Crafts

Denk backs up his position with figures: Apprentice wages paid by companies have increased by 19 to 35 percent since 2023, depending on the trade – significantly more than inflation. Government subsidies, on the other hand, remained unchanged during the same period because they are capped and not adjusted for inflation. "We've extended our hand, but we want a clear commitment to apprenticeships. Our companies invest 2.5 to 3 billion euros annually to offer young people solid training and a secure professional future. That deserves respect, appreciation, and support. The constant negativity has to stop." This is also supported by a survey conducted by the Austrian Chamber of Labor (AK) and the Austrian Trade Union Federation (ÖGB), in which apprentices rated their training companies with an average grade of 2.2. "A solid 'good'!" Denk comments on the result.

He also refers to the motion "Strengthening Apprenticeships – Securing Skilled Workers, Modernizing Training," which he submitted to the Economic Parliament of the Austrian Federal Economic Chamber (WKÖ). "This motion was unanimously adopted by all political factions. Let's work together to ensure that Austria receives the skilled workers we so urgently need. Because those who cut corners on apprenticeships today will pay double or triple the price tomorrow," Denk concluded.

Apprenticeship imbalance: oversupply in the west, shortage in Vienna

A regional look at the apprenticeship market reveals a clear west-east divide. According to Denk, there are around 2,000 more apprenticeships than job seekers across Austria – the problem lies less in the total number than in the distribution: Vienna lacks apprenticeships, while western Austria has a noticeable oversupply. Current figures from the Public Employment Service (AMS) also underscore this imbalance: In the western region (Upper Austria, Salzburg, Tyrol, Vorarlberg), the number of open apprenticeships exceeds the number of job seekers – for example, in Tyrol, where 410 job seekers are competing for 1,140 reported open positions.

In Vienna, by contrast, according to the AMS (Austrian Public Employment Service) forecast for 2026, there are approximately six job seekers for every reported apprenticeship vacancy; the so-called search rate there is around 20.6 percent, more than twice the Austrian average of 9.2 percent. For Denk, one consequence is unavoidable: young people must become more mobile in order to better match available apprenticeships with apprenticeship seekers regionally.

Sources: Austrian Federal Economic Chamber (WKÖ) press conference of the Federal Division of Trade and Crafts with SME Research Austria, July 8, 2026; OTS press release PWK334/HSP; Economic monitoring of trade and crafts (SME Research Austria); Basic funding for training companies, Apprenticeship.Funding online service (as of July 6, 2026); Public Employment Service (AMS)/Synthesis Research: Apprenticeship training – forecast of supply and demand 2026 (as of March 2026)