BERLIN, (Reuters) – Around 40% of German firms are already suffering from rising energy prices. Nearly half also want to decrease their investments as a result of increasing energy costs. A Monday survey revealed that this was the case.

German households entering new agreements for gas and electricity have hit record levels. Inflation in Germany reached a forty-year high following the invasion of Ukraine by Russia.

A survey conducted by Augsburger Allgemeine by the Ifo Institute revealed that 46% of German businesses want to cut their investments because of rising energy costs. Additionally, 25% of German companies anticipate a price shock in the second quarter of this year.

Survey of 1,100 businesses (mostly family owned businesses) revealed that 10 percent were considering quitting energy-intensive companies completely, with 14% considering job cuts because of rising energy costs.

Nearly 90% of businesses said that they will likely have to increase prices in order to offset rising costs. Three quarters, however, plan to invest more energy efficiency.

Rainer Kirchdoerfer is a board member at The Foundation for Family Companies, which conducted the survey. He stated that we need to have a policy which corrects competition and prevents energy prices from going up.

Germany’s ruling coalition has announced last month relief measures in the amount of roughly 16 billion Euro ($17.3 Billion). These are to aid consumers to cope with spiralling energy prices as well as to decrease their dependency on Russian gas, following the invasion by Ukraine.

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