Study: Extreme Heat Places Enormous Burden on the Economy

Extremely high temperatures at the beginning of summer cost the German economy 6.3 billion euros in just two weeks, from June 17 to 30, according to a study by the research and consulting firm Prognos.

The new heat record demonstrated how quickly extreme temperatures become a burden for society as a whole and for the economy, the study conducted for the German daily Handelsblatt states.

During the observed period, temperatures in many German regions exceeded 40 degrees, and average daily temperatures were significantly above average, resulting in a considerable lack of nighttime cooling.

All of this pushed hospitals to their limits, emergency reception centers were built, and the temperatures exposed all the weaknesses of the infrastructure: asphalt literally melted on highways, melted jointing compound halted tram traffic, buildings became overheated, and energy consumption increased.

However, the study only took into account direct losses in production, sick leave, and workplace accidents, not expenses for hospital treatments, fatalities, high energy costs due to air conditioning, damage to residential buildings and infrastructure, or the impact on agriculture.

According to Prognos, the study particularly highlighted losses in productivity, which account for about 97 percent of the financial losses.

„People take breaks more often, work more slowly and with less concentration, and when this is added up among millions of employees, it creates enormous losses. In addition, there are about 76,500 absences every day across Germany,“ the study states.

„Heat is no longer just a health risk, but also a growing cost factor for the economy. For the Ministry of Labor, we have already calculated—one day with a temperature above 30 degrees costs the economy 431 million euros. Now, for the first time, we have calculated the consequences of extreme heat above 35 degrees—they amount to 984 million euros, more than double,“ Prognos notes.

German credit insurer Allianz found in another study that employees’ ability to work at 30 degrees drops by three percent, and with each additional degree, it drops by another three percent.

The insurance company estimates that losses to the German economy due to extremely high temperatures could reach a total of 131 billion dollars by 2030.

A new survey by the German Trade Union Confederation showed that extreme heat is a burden for every third employee, and among workers who work outdoors, as many as 60 percent feel this.