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Sunday, May 22, 2022

German inflation: Soaring costs and shortages push industry to the brink

“There has never been anything like this before,” Georg Geier, the company’s managing director, told CNN Business.

The major difference between past and present? Customer demand is high, but Siempelkamp either can’t find, or can’t afford, the supplies of the iron, nickel and energy it needs.

These companies are a vital part of the “Mittelstand,” the 2.6 million small- and medium-sized enterprises that account for more than half of German economic output and nearly two-thirds of the country’s jobs. Many are family-owned and deeply integrated into rural communities.

The Siempelkamp foundry burns enough energy each year to power a town of 20,000 people. For years, the company paid between €40 ($43) and €50 ($53) per megawatt hour of electricity. But its bills shot up around September and “exploded” to all-time highs after Russia invaded Ukraine, Geier said. Average prices in March…

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