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Nearly one-fourth of Germany’s medium-sized enterprises fear they might not survive the soaring energy prices, a survey by the Federation of German Industries, BDI, showed on Monday.
Industries across Europe have been suffering from the surging energy prices since the autumn of 2021, when the natural gas crunch sent benchmark European gas prices soaring and electricity prices across major economies surging, too.
Many energy-intensive industries, such as fertilizer producers and steelmakers, had to curb production as the record gas and power prices slashed their margins.
The energy crisis is hitting not only consumers but industries, too, including in Europe’s biggest economy, Germany.
According to the Federation of German Industries’ survey of 418 companies polled between February 1 and 14, a total of 23 percent said that the surging energy costs of the past few months represent an existential challenge to them. Another 65 percent of the mid-sized firms polled say that the additional costs due to the rally in energy prices represent a strong headwind for their operations.
Around 87 percent want a quicker reaction from the federal government to reduce the burdens associated with the high electricity prices.
Of the more than 400 firms polled, 34 percent have cut on their investments in climate neutrality because of the soaring energy costs, the BDI survey found.
The federation fears that the high energy costs will crush the German economy, and some companies could be considering moving production abroad, BDI President Siegfried Russwurm said in a statement. The federation warns that soaring energy costs will increasingly weigh on production, Russwurm added.
The industrial mid-sized companies in Germany are the backbone of its economy, as those firms account for the largest share of the country’s economic output, employ about 60 percent of all workers, and contribute significantly to corporate tax revenues in Germany, according to BDI.
By Tsventana Paraksova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.