According to a report by The Economist citing data from the association of German industry BDI, rising energy costs will pose the biggest risk to the German economy, forcing some degree of deindustrialization if not ameliorated.

BDI President Siegfried Russwurm was quoted as saying, “The substance of our industry is under threat.”

The association noted the price of electricity for the next year has already increased fifteen fold, as the price of gas soared ten fold. The nation’s industry already has reduced gas consumption by 21% in July compared to a year prior.

According to a study by the consulting company FTI Andersch, the expenses are hitting smaller firms harder than larger ones. 25% of companies with fewer than 1,000 employees have had to cancel or decline orders, or plan to do so, while only 11% of companies with over 1,000 employees have had to do so.

Nearly 10,000 bread makers are also struggling as never before, due to the skyrocketing costs of gas and electricity to power their ovens and kneading machines.

According to the BDI survey, which queried 600 medium-sized companies, it showed roughly 10% were forced to reduce or interrupt output due to high input expenses, while over 90% called the price of energy and materials either a big or existential challenge for their company.

20% reported they were considering relocating part of all of their production to a different nation. This was particularly prominent among bigger companies with energy-intensive production lines, since they are being forced now to compete with other companies in other countries with far lower operating costs, where the cost of energy is lower. Given current conditions, the only way to compete, and cut their costs, is to relocate to nations where energy costs are cheaper.

Holger Schmieding, the chief economist of private bank Berenberg observed that if energy costs do not come down in the near future, as much as 3% of Germany’s energy-intensive businesses will be forced to relocate abroad.