The situation in the Czech Republic is starting to be unfavorable for the business of large companies. While it used to be true that this country was a great address, both for cheap energy and labor, today it is quite the opposite. Not only are new investors hardly arriving, but companies that have been doing business here for a long time are also leaving, or at least thinking about it.
Get used to it
They are mainly troubled by high energy prices. While it might appear that the situation has calmed down, it hasn’t. Prices have only remained at high levels and do not look set to fall significantly in the next few years. However, this is a huge cost for companies, which they can hardly cope with.
An example is the Draslovka chemical company, which is the largest producer of sodium cyanide in the world. According to the Lidovka server, this company has stopped its production in the Czech Republic and moved it to the United States of America.
According to the Chamber of Commerce, this is nothing extraordinary and similar transfers have been going on for some time, even if they are not talked about much. These are mainly various subsidiaries of large enterprises. Those in the Czech Republic are rapidly losing contracts at the expense of other countries, such as Spain or Portugal, where gas prices are much lower.
People will lose their jobs
Apparently, the Volkswagen company also feels the same way, which indicated some time ago that it could move production from central Europe to other locations. This would greatly affect Mladá Boleslav’s Škodovka.
The problem is above all the fact that the energy crisis has essentially affected only Europe, and only a part of it. The secondary sector is therefore one of the most affected areas ever. Thanks to this, it is at a strong competitive disadvantage as a production location. And that’s not good news for the Czech Republic, which has been stuck in production for a long time.
It can therefore be predicted quite reliably that companies will lay off workers here and unemployment, which is still very low, will rise.
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