Companies only pass on a third of higher costs to customers


Industry is planning to pass on higher purchasing costs for energy, raw materials and primary materials to its customers.

(Photo: imago images/imagebroker)

Berlin According to a survey, German companies are only slowly and not fully passing on their increased purchase prices to their customers. According to this, the companies have only passed on 34 percent of their purchase prices in the past few months, according to the survey published on Monday by the Munich Ifo Institute among 6,500 companies.

According to the companies themselves, weak demand, high competitive pressure and long-term contract terms prevented them from raising prices. By April 2023, however, they plan to increase the transmission to 50 percent. “This is likely to lead to further inflationary pressure on consumer prices in the coming months,” predicted Ifo researcher Manuel Menkhoff.

The industries differ significantly. Industry plans most strongly to pass on higher purchasing costs for energy, raw materials and pre-materials to its customers. The proportion here is 68 percent. In the construction industry, it is similarly high at 66 percent.

In retail it is 53 percent, with service providers only 36 percent. In industry alone, on the other hand, the range extends from 89 percent for producers of shoes and leather goods to 38 percent in beverage production.

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At 10.4 percent, the inflation rate in Germany is currently higher than it has been since 1951. The reason for this is the Russian war against Ukraine, as a result of which energy prices have risen sharply – from gas to fuel and electricity.

In addition, there is a shortage of raw materials and intermediate products in many areas, which have also contributed to inflation. For example, semiconductors, found in numerous products, have been a scarce commodity for many months. Disrupted supply chains – triggered, for example, by recurring corona lockdowns in China – are also driving prices up.

More: Companies are launching cost-cutting programs across the board – some are already calling for reorganization

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