Highlighting key findings from its forthcoming survey on energy, EEF stressed the fact that, whilst most companies still negotiated one year contracts, the survey showed an increasing number had responded to the recent increases by opting for contracts of two or more years. This means that they will be unable to benefit from the prospect of lower prices as a greater supply comes on stream this winter. In addition, the survey also showed only a small number of companies were able to switch fuels in response to disruptions to supply.
EEF also pointed out that, despite recent reports highlighting falls in energy prices, they still remain higher than at this time last year. In addition, unlike the price of petrol which can be passed straight on at the pump there is little likelihood of falls in gas and electricity prices feeding through until sometime next year.
Commenting on the survey, EEF Director General, Martin Temple, said:
"Whilst there is no dispute that the outlook for this coming winter is improving, we are not yet out of the woods as far as the impact of previous rises are concerned.
"Despite recent falls, the price of energy remains higher than it was this time last year and there is little prospect of industry seeing any benefit for the foreseeable future. This is not a case of ‘job done’ as far as government and the energy industry is concerned."
Key findings:
- 92% of companies had experienced energy price increases
- Gas and electricity prices increased on average by 55% and 42% on average
- 80% of companies reported gas price increases of 30% or more (up from 54% in 2005)
- 76% of companies experienced increases in electricity prices of 30% or more (up from 53% in 2005)
- Looking ahead 82% of companies expected further price increases in the next twelve months. Of those, 51% expected ‘higher’ increases and 31% ‘significantly higher’ increases
- Only 4% of companies had back-up supplies. Of those, only 32% said that these could meet their needs in the event of an interruption to supply.
EEF presented these results to the Business Energy Forum chaired by the Secretary of State for Trade & Industry, Alistair Darling MP on 20 September.
ENDS
The survey of 232 companies was conducted from mid July to mid August 2006
EEF, the manufacturers’ organisation is the representative voice of manufacturing in the UK with a federation of 11 regional Associations, UK Steel and ECIA, the Engineering Construction Industry Association. The EEF has a growing membership of almost 6,000 companies of all sizes, employing some 900,000 people from every sector of engineering and manufacturing.