Germany’s leading business daily Handelsblatt has an alarming report on how industry is coming under increasing pressure from high energy prices, with numerous industrial sectors already responding with cutbacks in production to save gas and electricity. Energy price inflation is particularly affecting the energy-intensive sectors, which have cut production across the board: The steel industry, by around 5%, the chemical industry, by 8%. The fertilizer industry has either cut back or shut down fully 70% of its production capacity in Germany.
Experts expect that the rapid loss of competitiveness could permanently change the German economy. Oliver Falck, head of the Ifo Center for Industrial Economics, told Handelsblatt: “If energy prices remain as high as they are at present in the long term, this could lead to some industries leaving Germany.” That would particularly affect energy-intensive companies such as the metal and chemical industries, as well as basic industries such as oil, glass, ceramics and paper. Most affected industries had already suffered competitive disadvantages before the Ukraine war, of which Falck remarked, “The current crisis is accelerating this process.”
