Insight 37 - Magazine - Page 25
Firms impacted by
high energy costs
M
ore than 80% of firms fear that
they will have to increase the
cost of their goods - with most
citing an increase in energy as the main
factor.
This is according to a new survey of
750 UK organisations, conducted by
PwC in November and December 2023.
Respondent organisations form a mix of
both private and public sector, operating
across various industries.
Over the last two years, 77% of businesses
said high energy costs had driven up the
price of their products and services, at
least moderately. Over a quarter of all
companies cited energy costs negatively
impacting profits and margins over the last
two years.
Now 81% plan to increase the price of their
products and services at least moderately
over the next two years, in response to
high energy costs and with government
energy support set to end.
High energy costs also negatively
impacted companies’ ability to compete
both domestically (64% affected) and
internationally (65% affected).
Looking to the next two years, 81% of
respondents agreed that energy costs
would drive up the price of products
and services further, either significantly
or moderately. 72% expect high energy
prices to negatively impact profits and
71% expect high energy prices to reduce
their ability to compete in international
markets.
Overall, energy costs had increased by
11% or more for a third of organisations
over the past two years. All respondents
said they had received at least one form of
government energy support in the same
time period, which had been classed
as ‘essential to survival’ by a quarter of
respondents.
Respondents were divided on their energy
strategy objectives. Reducing energy
consumption (27%), reducing carbon
emissions (26%) and reducing energy
costs (26%) all held similar priority as a
main energy strategy objective. Popular
cost mitigation efforts by respondents
included reviewing energy procurement
strategies (37% fully adopted, 37% in
progress), improving energy efficiency
(31% fully adopted, 44% in progress)
and adopting corporate power purchase
agreements (34% fully adopted, 35% in
progress).
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