Productivity losses in June heatwave cost Germany over six billion euros - analysis

The unprecedented heatwave that hit Germany and large parts of western and central Europe in late June cost the country’s economy at least 6.3 billion euros in lost productivity, newspaper Handelsblatt reported. In an analysis commissioned by the newspaper, consultancy Prognos looked at lower productivity among workers during the hot period as a driver for economic losses. Contacted companies also said they faced higher costs due to increased cooling demand, altered working hours and protective measures.

With an estimated loss of 1.9 billion euros, the production sector saw the greatest impact on productivity, the analysis found, followed by healthcare, social services and retail. Construction and the energy sector also were substantially impacted. The temperatures were particularly critical for workers exposed to hot working environments, such as factories, on construction sites and for animals in food production. The authors said that the estimated damages represent a lower boundary, as factors such as higher energy prices, machinery failure and supply chain disruptions were not included.  

The end of June brought temperatures above 40 degrees Celsius in many regions across Europe, leading to new temperature records in several countries. Manfred Fischedick, head of the climate think tank Wuppertal Institute, told the newspaper that economic threats from climate change should be taken as seriously as, for example, competition from China. “These debates belong together,” he said. Handelsblatt said experts estimate three to four similar heatwaves are possible in Germany per year, implying annual productivity losses of more than 20 billion euros due to heat stress. 

Insurance company Allianz had already estimated in May productivity declines of three percent for every additional degree above 30C, while cooling demand goes up by 1.2 percent per degree. This in turn means higher costs for the state due to lost tax income and additional expenses for health, infrastructure and social protection in response to high temperatures. 

The Prognos analysis found that economic losses could amount to nearly one billion euros per day for days beyond 35°C. Germany’s weather service earlier this week said that the June heatwave meant a "watershed" for climate adaptation in Germany, which now had to prepare for heat stress situations that in Europe so far were common only in Mediterranean countries.