About 40% of German companies have already sensed the consequences of the rapid rise in energy prices over the past several weeks, a survey by the Ifo Institute for Economic Analysis in Munich published on Monday has found.
The survey covered 1, 100 German enterprises, 950 of which were family owned. As many companies selected have long-term supply contracts, not all respondents said they felt hefty price increases so far. However , a quarter from the firms surveyed said they will expect their energy expenses to spike in the 2nd half of this year, while an additional quarter believe it will occur in 2023. The survey also showed that nearly 90% of businesses are more likely to raise prices to counter-top the skyrocketing energy costs, and three-quarters of the companies intend to invest more in energy efficiency.
Some 11% of the firms are considering the possibility of completely leaving energy-intensive business areas, plus 14% are studying associated with cutting their staff. Nevertheless, only a small percentage from the surveyed companies want to proceed their offices abroad.
“ We need a policy that corrects this bias of competition and stops skyrocketing energy prices, ” Professor Rainer Kirchdö rfer, one of the experts behind the survey, said, referring to the fact that Germany had significantly dropped its competitiveness in power policy even before the current energy crisis, brought about by the activities in Ukraine.
Energy prices soared last month, after Russia launched a military operation within Ukraine, which triggered a flood of Western financial sanctions against Moscow, though the measures stopped simply short of an embargo upon Russian crude oil and gas. Russia retaliated by presenting a new ruble-based payment system for its natural gas, hinting at the possibility that other power exports might follow.
According to the German news agency DPA, citing data from the Verivox online system, the increase in energy costs will inevitably lead to a substantial increase in electricity prices pertaining to private consumers in Germany this year. Electricity suppliers in the country, responsible for roughly 13 million families, have already announced an increase within tariffs in April, May and June by a typical 19. 5%. Growth within gas prices is anticipated to be even greater, at about forty two. 3%.
Based on Verivox, if a household paid an average of € 1, 171 ($1, 258) for electrical power per year prior to the Ukraine problems, with the current costs it provides to pay some € 1, 737 ($1, 867). The situation is even worse with natural gas: a household that paid € 1, 184 ($1, 272) for gas annually in April last year would spend € 2, 787 ($2, 995) at current costs, which equals to an raise of 135%.
The EU pledged to end its dependence on Russian power earlier this month, regardless of importing roughly 40% from the gas and 30% from the oil from the country. Nevertheless , experts and politicians inside the bloc have warned that banning Russian energy imports could only lead to additional price spikes, as it would be impossible to find an alternative quickly enough.