Extreme Weather Drives Up Costs Across German Industries, Especially Hospitality and Construction

Extreme weather conditions are significantly increasing operational costs for numerous business sectors in Germany, with the hospitality industry bearing the brunt. According to the IHK-Ostbrandenburg, 65% of hospitality businesses report cost pressures, particularly from soaring energy, raw material, and food expenses. The construction sector follows closely, with 54% of companies affected by rising costs, compounded by worker productivity challenges caused by intense heat and heavy rainfall. Industrial firms face notable productivity issues, especially in energy-intensive areas, with 52% reporting impacts. Craftspeople and the service sector also experience notable cost pressures, at 50% and 47% respectively.

Daniel Felscher from IHK-Ostbrandenburg highlights that these sectors, especially in East Brandenburg, were already contending with inflation and energy price increases, now further strained by the need for more heating or cooling due to extreme weather. Moreover, local businesses report declining orders amid global uncertainties, as noted by the IHK Bonn/Rhein-Sieg, where 82% of companies identify rising energy and raw material costs as major risks. Operational difficulties, such as disruptions caused by infrastructural issues like the Nordbrücke, worsen the outlook.

The overall business climate remains tense, with only 10% of companies expecting improvement and just 20% planning investments this year. Many firms are considering workforce reductions due to economic pressures. The IHK warns of looming increases in local business taxes amid fragile municipal finances, urging stronger federal and state support and faster reform implementation to alleviate burdens on businesses.