Rising Overheads: 80% of Companies Struggle to Survive

The energy costs of most domestic firms at least tripled last year. The increased charges have forced companies to pass on costs to customers and to invest in energy efficiency, according to a survey of 70 medium and large Hungarian companies by Ernst & Young.

Eight out of ten companies saw their energy costs at least triple in 2022, while nearly half of those surveyed (46%) saw an increase of at least five times.

In response, the vast majority of companies (79%) have been forced to pass at least part of the costs on to consumers and to develop new strategies for pricing and sourcing products. The industrial sector has been the most effective in compensating for past cost increases by raising prices.

The sudden and drastic price increases have changed the mindset of company managers. The priority list for organizations includes both short-medium and long-term management of the issue.

More than 80% of companies also believe that investments in energy efficiency are needed to remain competitive.

So far, a quarter of respondents have decided to replace their current consumption with some form of alternative energy source, the most common technical solutions being solar panels and heat pumps.

Service companies, which have a smaller share of energy in their cost structure, are also significantly behind industrial and technology players in taking concrete steps.

Nearly two-thirds (60%) of firms believe that regulatory uncertainties and a lack of management resources are the main obstacles to making planned investments.