Companies continue to see energy prices, personnel shortage as key business risks – survey

Energy prices are slowly stabilising in Germany but companies continue to see them as a business risk for the coming months, shows an economic survey by the German Chamber of Commerce and Industry (DIHK). Some 21,000 companies from all industries across the country responded to the survey, which showed that the German economy is still stagnating, said DIHK. "The sideways trend that we feared since the beginning of the year continues," said Ilja Nothnagel, the DIHK’s head of economic analysis. "There are still no signs of a broad-based upturn." Nearly two-thirds (65 percent) of companies still consider energy and raw material prices as the greatest business risk – less than the 72 percent at the beginning of the year. Persistently high energy and producer prices, along with rising interest rates and a sluggish global economy, “pose significant challenges for many businesses,” the report states. Despite all this, companies have shown remarkable resilience, said Nothnagel. However, "DIHK continues to expect zero growth this year," he said. The organisation said the shortage of skilled workers and labor costs are increasingly seen as a business risk. Three out of five companies (62%, up from 60%) identify the shortage of skilled workers as a business risk.

Economy minister Robert Habeck is pushing for billions of euros in state subsidies to lower electricity costs for energy intensive industry. However, chancellor Olaf Scholz and finance minister Christian Lindner have come out against the idea of large-scale subsidies, so the government has yet to debate the proposal. Also, hefty subsidies by Europe’s economic powerhouse for its domestic industry are bound to irk neighbouring EU countries with less financial leeway, and the economy ministry says it is “aware of the concerns.”