University of Mannheim: GBP Monitor: Almost two-thirds of companies plan to raise prices – and 3G in the workplace is very controversial

As recently as October 2021, the long-lasting decline in corporate profits during the pandemic initially seemed to have come to an end. Only two months later, the growth momentum weakened significantly: In view of the fourth corona wave, ongoing supply bottlenecks and political calls for further lockdowns, corporate profits slipped significantly and in December 2021 even reached a lower level than in the first year of the pandemic (-3.42 percent compared to the same month last year).

The data collected shows that the situation is life-threatening for many companies. The expected default probability – i.e. the risk of a possible business closure – increased for the third time in a row. “The situation is particularly critical in the crisis sectors that were already badly hit in 2020, such as gastronomy, tourism and entertainment. These are suffering even more than in the previous year from the gentle lockdown with measures such as 2G-Plus,” reports Prof. Dr. Jannis Bischof, holder of the chair for business administration and corporate accounting at the University of Mannheim and scientific project manager of the GBP.In these sectors, the probability of default rose to 22.5 percent (up 2.0 points). However, the development is not uniform and the mood in other sectors remains optimistic. Construction and manufacturing, for example, have been largely unaffected by such threats.

The company leaders stated that they wanted to partly compensate for the downward trend with price increases: almost two thirds of them (64.9 percent) plan to ask customers and suppliers for higher prices in the new year. “Particularly in retail and industry, companies want to raise their prices and thus compensate for increased procurement costs. Energy sources such as oil, but also wood, for example, have become massively more expensive in recent months. Companies are now passing this inflation on,” reports Dr. Davud Rostam-Afshar, the Academic Director of the GBP.

Satisfaction with the 3G rule in the workplace The new 3G rule in the workplace and the resulting financial burdens were also a
topic of the current survey. Opinions are very divided here: while more than 40 percent of the companies surveyed think the new regulation is very positive, a significant proportion (15 percent) completely reject the 3G rule. These include, above all, small companies that are also financially burdened by the necessary controls.

What is striking is the above-average proportion of companies in the construction industry and trade that view the 3G rule as very negative. Hotels, restaurants and event companies, on the other hand, are above average satisfied with it. This rule seems to be an acceptable solution for them to avoid another lockdown.

It also seems remarkable that the regulation is particularly poorly received in the federal states that had the highest incidences in December – i.e. in eastern Germany, where rejection is up to 51 percent, such as in Thuringia. “Especially where the 3G rule is intended to protect employees and companies to a particularly high degree, it has been particularly badly received. There is a perception that politicians are shifting the responsibility for vaccination onto companies. This leads to an acceptance problem,” states Bischof.

Comments are closed.