90% of German manufacturing companies expect negative effects due to Iran war: Survey

BERLIN

Around 90% of German manufacturing companies expect the Iran war to affect their business, while only 9% do not currently see negative consequences for themselves by the military conflict, according to a survey released by the Munich-based Ifo Institute on Tuesday.

“The conflict impacts manufacturing directly but above all causes major uncertainty. Many companies are preparing for additional burdens in the coming months,” said Klaus Wohlrabe, head of surveys at Ifo.

Most manufacturing companies (78%) point to higher energy prices as the reason, while 36% cite restricted shipping routes and supply problems for intermediate products and raw materials, respectively.

Some 16% of companies fear that air freight traffic will be disrupted and around a quarter (24%) expect demand to decline in key export markets.

In addition, many companies see financial risk, for example, due to uncertain freight and logistics costs, rising insurance premiums, or increased payment risks.

“The results make it clear that the economic consequences of the Iran war can already be seen now, and could be compounded via various channels. The longer the uncertainty lasts, the greater the economic problems will be for the companies,” said Wohlrabe.