Whether it’s electricity or gas, energy prices have skyrocketed in recent months on wholesale markets, in the wake of the post-Covid recovery in 2021 and the war in Ukraine. The consequence is increased bills for many industrial companies, particularly those that were forced to renegotiate their contract in the second half of 2022 when prices were at their highest.
Faced with this brutal energy inflation, French companies had to adapt. To preserve their activity they have adopted various strategies, according to an INSEE survey carried out in February and published this Wednesday.
For example, almost half of the industrial companies have increased their prices in the last three months and more than 35% say they have compressed their margins. 44% of the companies surveyed have also adapted their production methods and more than 30% say they have made investments to protect themselves from rising energy prices. 17% also acknowledge having “withdrawn from their box”, while 26% have implemented “other measures” and 10% have not “changed anything”.
Little reduction in activity
The reduction or cessation of activity due to the rise in gas and electricity prices, on the contrary, remained marginal (5 and 0.3% of industrial companies, respectively). In addition, the average industrial production index increased by 2.3% in the second half of 2022.
If we look in detail, however, we see that some branches, including energy-intensive ones, have reduced their activity. This is the case of 14% of wood-paper companies (average drop in activity of 2.8%), 13.4% of chemical companies (average drop of 2.7%), 12.4% of metallurgical (average drop of 4%)…
This drop in activity in the target branches partly explains the drop in the industrial production index in the steel industry in the second half of 2022 (-16%), in the manufacture of pulp, paper and cardboard (-10.4%) or in the manufacture of basic chemical products.
45% of companies plan to increase their prices in the coming months
INSEE also asked the companies what they planned to do in the next three months. More than 45% plan to increase their selling prices, and even 70% in the food industry. 30% plan to compress their margin, less than half to adapt their production methods and 34% plan to make investments.
However, only 3% plan to reduce their activity in the next three months. A figure that once again hides disparities while this proportion reaches 10.7% in the wood-paper branch, 8.3% in chemicals and 6% in metallurgy compared to only 1.5% in agri-food or capital goods .
Source: BFM TV
