New European chamber network analysis emphasises damaging link between energy prices and employment

New economic analysis by the European chamber network confirms the damaging impact of high electricity costs on the employment market. As energy prices remain a vital input for many sectors, and with entrepreneurs already struggling with skills shortages and rising labour costs, these findings reinforce a clear message: affordable energy is essential to keep Europe’s economy growing.

The new Eurochambers report examines the sensitivity of employment to electricity prices by using aggregate industry data from across 28 European countries, covering the period from 2008 to 2021. The results, consistent with previous research in the area, indicate that increasing electricity prices have a strong negative impact on European employment, and by implication, on European competitiveness and prosperity. Structural issues such as high energy prices relative to global competitors and Europe’s demographic shift present long-term challenges that demand a forward-looking strategy.

Eurochambres President Vladimír Dlouhý commented: “High energy prices have been a persistent challenge for Europe, only made worse by the pandemic and ongoing war in Ukraine. Unlike the US and China, this puts us at a disadvantage, holding back investment and job creation. Affordable energy is a key factor in our competitiveness and in our businesses’ capacity to create employment opportunities.”

Eurochambres calls for the swift implementation of the initiatives under the Action Plan for Affordable Energy to reduce energy prices and prevent future disruptions. A well-integrated Single Energy Market is urgently needed to improve efficiency and deliver a competitive and resilient economy.

The European Commission and national governments must act fast to modernise infrastructure, harmonise rules, speed up approvals, and invest in workforce retraining. This includes advancing the Union of Skills to help overcome labour and skills shortages across Europe.

Read the full report here.

Source: Eurochambers