The heat wave in June proved costly for the German economy. The two-week heatwave cost the economy at least 6.3 billion euros, the Handelsblatt newspaper reported on Thursday, citing calculations by the consulting firm Prognos.
The manufacturing sector bore the largest share, at around 1.9 billion euros, followed by healthcare and social services, and then retail. As the Handelsblatt newspaper reported, the analysis quantifies for the first time the economic damage caused by a short heat wave to individual sectors. According to Prognos, 97 percent of the damage stems from declining productivity among employees, not from machine breakdowns or supply chain problems, the newspaper reported.
"The 6.3 billion euros is, if anything, a lower bound," "Handelsblatt" quoted Prognos expert Lukas Sander as saying. Additional costs, such as those from higher energy prices, have not yet been captured in the calculation.
Manfred Fischedick, president of the Wuppertal Institute for Climate, Environment and Energy, sees the findings as a warning sign for Germany as a business location. "We're having an intense debate about competitiveness and competition from China. At the same time, we're increasingly losing productivity to heat in the summer months. These two debates belong together," he told "Handelsblatt."
As the newspaper further reported, several companies confirmed additional costs from cooling, adjusted working hours and protective measures for employees.
In May, credit insurer Allianz Trade had already announced that Germany faced billions in losses from extreme heat. From temperatures of 30 degrees Celsius, productivity drops by about three percent for every additional degree, it said, while energy costs simultaneously rise by around 1.2 percent per degree due to higher cooling demand.
According to the insurer, the economic losses also have consequences for the state, through falling tax revenues alongside rising expenditure on healthcare, infrastructure and social security systems.
From breaking news to thought-provoking opinion pieces, our newsletter keeps you informed & engaged.
By subscribing, you agree to our Terms & Conditions and Privacy Policy.
