Mariam Sharman

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Mariam Sharman
Proposted By Xpylon News Update

🇩🇪📉 High Energy Prices Push German Energy Firms to Consider Relocation Abroad

High energy prices and a lack of reliable energy supplies are compelling many German companies to consider relocating abroad. A significant number of firms have already started moving parts of their operations to other countries. This trend is particularly strong among companies in energy-intensive sectors such as mechanical engineering, industrial goods, and automotive manufacturing.


According to a Deloitte report, about two-thirds of German companies have relocated some operations due to high energy costs and inflation. The survey also indicates that companies are shifting both low-skilled and high-skilled production processes to countries with more favorable energy prices​ (Brussels Signal)​. Additionally, the Association of German Chambers of Industry and Commerce (DIHK) noted that investing abroad has become more attractive for many firms due to the high cost structures in Germany​ (Xinhua)​.


Prominent examples include BASF, a chemical giant, which has announced a permanent downsizing of its European operations to escape high energy costs. This move reflects a broader concern that continued high energy prices could lead to a significant deindustrialization of Germany's heavy industry, which is vital to its export-led economy​ (POLITICO)​.


Despite the short-term measures like building up gas reserves and government aid, the long-term outlook remains challenging. Economists warn that if energy prices do not stabilize, more companies may follow suit, relocating operations to ensure their survival​ (POLITICO)​.

Energytransition
Energy
GermanEconomy
EnergyCrisis
ManufacturingAbroad
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