German companies expect production cuts as Russian gas shuts down


58% of German companies could not replace Russian gas overnight

Most German companies cannot switch their energy supplies and would experience significant production cuts if Russia completely cuts off gas supplies to Germany because of the war in Ukraine. Many companies are already suffering from the effects of the war, according to a study by the Institute for Labor and Vocational Market Research (IAB) of 2,000 companies across Germany. 58% of them admit they won’t be able to replace Russia’s gas supply any time soon if it is shut down overnight, and 14% already admit their production has been reduced as a result of the war in Ukraine.

In addition, two-thirds of energy-intensive companies that need gas to operate expect a significant drop in their production and even a total shutdown. More than a fifth of those who don’t expend energy intensively are said to have the same problem, says research, made public this Wednesday. Although in the event of a total cut off of Russia’s gas supply, there would still be a limited supply, there would inevitably be a rationing of this energy product, underlines the analysis published by the specialized magazine Wirtschaftsdienst.

The survey shows that 70% of German companies have been affected by the surge in energy prices since the start of the Russian invasion of Ukraine last February. Almost one in two, 45%, has been forced to raise prices as a result of the conflict. The price increase is particularly high in the construction sectors with 77% of companies, transport (75%), catering (73%) and industry (67%). On the contrary, the labor market has so far proved robust despite the war. Only 12% of companies have taken labor measures, mostly in the form of short-time work and overtime. Hardly anyone talks about layoffs.

Source: La Verdad


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