The energy crisis is putting many German firms under the test | Whuff News

BERLIN, Nov 2 (Reuters) – The energy crisis is affecting almost all sectors of the German economy, with the number of companies seeing high energy costs due to the war in Ukraine as a threat to business at a record high, a DIHK business survey showed on Wednesday.

Some 82% of the 24,000 businesses surveyed see energy prices and raw materials as a business risk, which the DIHK – the Association of Chambers of Commerce and Industry of Germany – said was the most important factor since it began keeping records in 1985.

Accordingly, optimism was lacking, with only a record 8% of those surveyed expecting to improve. “Even during the coronavirus and the financial market crisis, the percentage of people who are optimistic was more than 10%,” said DIHK head Martin Wansleben. “Companies fear the worst is yet to come.”

While the first half of 2022 was helped by the lifting of pandemic restrictions, “these growth impulses were eaten up by the energy price crisis, inflation and the depressing global economy for months,” Wanleben said. “The German economy is facing not only a difficult winter, but also a difficult year,” he added.

More than half of companies said they expect their business to decline in the next 12 months, according to the DIHK, which confirmed its spring forecast that the German economy would grow by 1.2% in 2022 and then shrink by 3% in 2023.

The survey leaves little room for any doubts about the direction of the coming months, said DIHK Ilja Nothnagel.

The latest German government forecast is for growth of 1.4% this year and a contraction of 0.4% next year.

Energy prices have risen at an unprecedented rate in the months since Russia invaded Ukraine, and Germany has found it can no longer rely on Russia as it has for decades to power its industry.

In response, almost one in five major power sectors have reduced production or their offerings, while all 12 are considering shifting production elsewhere, said the DIHK, especially companies in the automotive industry, at 17%.

“We often hear from firms that they are looking for or looking at areas that match their portfolio in terms of strength,” currently the United States, Nothnagel said.

Reporting by Miranda Murray; Editing by Paul Carrel and Hugh Lawson

Our standards: The Thomson Reuters Trust Principles.

Source link