The increase in energy and fuel prices on the international markets in 2021 had a significant impact on the total costs for around two thirds of South Tyrolean companies. Just as many companies were significantly affected by price increases for materials and goods. In many cases, the cost increases could not be passed on to the sales prices. This is the result of a special analysis carried out by the WIFO – Institute for Economic Research at the Bolzano Chamber of Commerce as part of the economic barometer.
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2021 was a boom year for economies around the world. However, the restart went hand in hand with a rapid increase in demand for energy, raw materials, semi-finished products and components, which led to higher prices. According to the Commodity Price Index calculated by the World Bank at a global level, energy product prices rose by 148 percent in March 2022 compared to the pre-crisis level of February 2020. The increase in non-energy commodities averaged 71 percent, but reached 97 percent in metals.
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Concern about South Tyrolean companies
South Tyrol’s companies have also felt this unfavorable dynamic. The WIFO analysis shows that in 2021, both energy and fuel price increases and price increases for goods and materials had a significant impact on total costs for around two-thirds of companies. Few of these companies were able to fully pass on the higher costs to selling prices, with about half being able to do so at least in part.
In 2022, the situation has worsened. At the time of the survey in February, six out of ten companies feared that further price increases for energy and materials over the course of the year would have a significant impact on their costs. In the aftermath, price dynamics continued to deteriorate due to the Russo-Ukrainian war and the imposition of sanctions on the Russian Federation by Western countries.
Michl Ebner, President of the Bolzano Chamber of Commerce, is concerned about the effects of rising prices on the upswing: “For two years, entrepreneurs have had to fight to keep their businesses open and to secure the future of their families and employees. The massive increase in energy and raw material prices will slow down the upswing. In these difficult times, politicians must pay special attention to the economy.”
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