A recent survey by the German Chambers of Industry and Commerce (DIHK) has found that a significant portion of German companies are contemplating relocating abroad or cutting production in response to high energy costs and unreliable energy supplies. This trend has worsened compared to previous years, with 37% of companies now considering such actions, up from 31% last year and 16% in 2022.
Energy-intensive industrial firms are particularly affected, with 45% considering relocating or reducing output. The DIHK attributes this to the government's failure to provide a reliable and affordable energy supply, leading to a loss of trust in energy policy.
Many companies are reducing investment in core processes due to high energy costs, further jeopardising their competitiveness. The DIHK criticised the government's recent industrial support package for not addressing energy supply and price concerns, which are considered crucial for businesses. The survey also showed that more than a third of industrial companies are scaling back investment in core processes due to high energy costs, and two-thirds of industrial firms see their competitiveness at risk.
The survey also revealed a decline in climate protection investments due to price pressures and output drops. Companies' sentiment towards the energy transition has reached its second-lowest point in the survey's history, with the risks outweighing the benefits in their view.
The DIHK called for government action to reduce taxes and electricity fees, facilitate energy self-supply through direct wind energy contracts and access to hydrogen, and provide predictability for businesses. While recent government measures to reduce bureaucracy have been implemented, their impact has not yet been felt by companies. Achim Dercks, DIHK deputy chief executive said, "The trust of the German economy in energy policy is severely damaged," adding that the government had not succeeded in providing companies with a perspective for reliable and affordable energy supply.
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