Energy Costs Drive German Firms Abroad: Survey Reveals Crisis

A recent survey reveals that high energy prices and unreliable supplies are prompting many German industrial companies to consider relocating abroad or cutting production. The economic strain follows Russia's invasion of Ukraine, with energy costs remaining high. The German government faces criticism for inadequate energy policies.

High energy prices and a lack of reliable energy supplies are hindering German companies' production and investments, a survey revealed Thursday. A growing number of industrial firms in Germany are considering relocating abroad due to the adverse economic conditions.

According to DIHK Chambers of Industry and Commerce, 37% of approximately 3,300 surveyed companies are mulling over cutting production or moving operations overseas, up from 31% last year and 16% in 2022. The economic strain, spurred by Russia's invasion of Ukraine, has resulted in a significant contraction in German industrial activity.

Achim Dercks, DIHK deputy chief executive, warns of potential deindustrialization if the German government fails to provide a reliable and affordable energy supply. Despite recent price reductions, energy costs in Germany remain higher compared to other countries, impacting the competitiveness and investment plans of many companies.

(With inputs from agencies.)