German firms see raw material costs as big risk in 2011 - survey

04 February 2011 16:36  [Source: ICIS news]

TORONTO (ICIS)--Rising raw material and energy costs are the biggest risk for Germany’s industrial producers in 2011, the country’s chamber of commerce said on Friday.

The chamber, DIHK, said findings from a recent survey of 28,000 companies showed that 75% see the “immense rise in costs for resources as danger Number 1” this year.

The chamber estimated that Germany could pay some €40bn ($55bn) more for raw materials in 2011 than in 2009, reflecting an increase of 40% over two years. 

DIHK general manager Martin Wansleben said German producers would not be able to pass on the full raw material cost increases to consumers.

“The remainder [of the cost increase] will cut into producers’ profits,” he said.

Companies focused on the domestic market would suffer especially hard, as German consumers were “highly price conscious”, Wansleben said.

Exporters, on the other hand, had a better chance of passing on the rising input costs, he said.

He pointed to Germany’s export-oriented machinery firms. In that sector, “only” 60% of firms saw rising raw material and energy costs as a risk, he said.

Wansleben said DIHK expected rising raw material and energy prices to hurt Germany’s otherwise good growth prospects this year.

He also warned of the volatile situation in Egypt. Potential problems with oil supplies through the Suez Canal could lead to shortages and higher oil prices in Germany, he said.

In related news, the European Commission this week proposed a series of measures to protect the EU against the volatility in commodity prices and to secure the access of raw materials.

($1 = €0.73)

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