Situation in energy-intensive manufacturing sectors in Slovenia

english

2024

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Energy-intensive manufacturing sectors supply us with products that it would be dif-ficult to imagine the normal functioning of contemporary societies without. In Slove-nia, these sectors still account for significant shares of GDP (3.5%) and employment (3.8%). Because of the energy crisis in Europe, the deteriorating geopolitical situa-tion and the consequent rise in electricity and gas prices to an internationally uncom-petitive level, they find themselves in a difficult position in connection with costs. This is being evidenced in a decline in output, weak exports, falling employment and low confidence, while their prices have risen by significantly more than those in the economy overall. Output over the 12 months to August 2024 was at the level of 2014, while one-year exports were down 8.3% in year-on-year terms, and the workforce in employment was down 3.7%. The confidence indicator was down 10.7 percentage points on its long-term average in October, and producer prices in September were up 38.1% on December 2020. In Slovenia, rising imports of products made by energy-intensive sectors, particularly chemical products from China and India, are the primary reason for the large merchandise trade deficit according to the SORS methodology. The situation in 2024 was nevertheless less severe than in the previous year, but the future remains uncertain. Persistence of the lack of global competitiveness on the part of domestic energy-intensive sectors and manufacturing as a whole could drive a further increase in import dependence. This could be problematic in times of heightened geopolitical tensions and fragmentation, while the longer transportation routes are already making it harder to meet environmental targets, at least from a global perspective. The situation demands careful consideration about the impact of energy policy, the green transition and geopolitical relations on the long-term interna-tional competitiveness of industry in Slovenia and the EU.

29.11.2024