Energy prices no leading factor for German companies' future success – report
Clean Energy Wire
High energy prices have little influence on the transformation needs of most of the 100 companies on Germany’s HDAX stock market index compared to four other structural fields, challenging the idea that energy costs are having a large impact on the future success of German companies, a report by the strategy consultancy Advyce & Company found.
The analysis, conducted in cooperation with the Deutsche Schutzgemeinschaft für Wertpapierbesitz e.V. (DSW), which represents private investors' interests, found that and only a few sectors – the chemical industry, raw material producers and energy suppliers – reported a heavy burden by rising energy costs. Intense media coverage of the topic is explained by energy costs being “the straw that broke the camel’s back” after the companies had already been challenged by other issues, the DSW said.
The analysis found the biggest issue for companies at a 31 percent share of transformation pressure were structural costs and wages. Other major issues included regulations (24%), tough international competition (21%) and a lack of skilled workers (20%). Rising energy costs were the weakest factor (4%). “The financial and debt crisis, the coronavirus pandemic and the war on Ukraine are difficult external challenges. However, this should not obscure the fact that many of the current problems are home-made and the result of companies simply sleeping through important changes for over two decades,” said Martin Geißler from Advyce & Company.
Many organisations, for example, still have outdated organisational structures with inefficient and barely digitised processes, which drive up structural costs, the analysts found. German companies are subject to 18 percent more regulations than 10 years ago and invest half the amount that U.S. companies do into R&D, leaving them lagging behind, it added.
Earlier this month, the German industry association BDI called for the next government after February’s election to ensure lower energy prices at the EU and national level.
