Energy prices top risk for Australian business: survey

Energy price shocks are the number one concern of Australian business, according to a global survey.

The World Economic Forum Global Risks 2018 report, published by Zurich Insurance Group and Marsh and McLennan companies, surveyed more than 12,400 executives from 136 countries, and put energy pricing as the leading concern for businesses operating in Australia within the next 10 years.

Australia was the only country to rank energy price as its major concern, and the only other nation apart from Canada to include adapting to climate change within its top five risks.

This is a massive jump for energy pricing's risk rating; last year it was fifth on the list for Australian businesses.

About a third of commercial and industrial companies that have been affected by spiralling energy prices had considered either reducing production or shutting down because of energy pressures, the Australian Competition and Consumer Commission said.

"Many medium-sized food and non-food manufacturers have seen prices increases by 20 per cent recently or 100 per cent over last five years," ACCC chairman Rod Sims said.

While energy prices took pole position for Australian business, it was closely followed by asset bubbles, cyber attacks, high unemployment, critical infrastructure shortfalls and climate change.

Globally, unemployment was ranked first, followed by fiscal crises, failure of national governance and energy prices at fourth.

"Energy pricing's leap to pole position reflects how pressing an issue securing our energy supply has become for Australian businesses," said Costa Zakis, Pacific head of Marsh Risk Consulting.

"While energy price shocks add to the cost pressures and challenges profitability for all businesses, in sectors like manufacturing, the prospect of energy shortages pose a serious threat to their ability to operate," he said.

This was supported by Australian Industry Group chief executive Innes Willox, who said the gas agreement between major eastern seaboard energy companies and the federal government had given manufacturers breathing room, but was not a long-term fix.

"The agreement should help avoid the looming supply crunch we've feared - for now," Mr Willox said.

"[The government's] ongoing vigilance will remain necessary to guarantee supply and put downward pressure on prices for all energy users."

The World Economic Forum's full global risk survey will be released in January 2018.

The story Energy prices top risk for Australian business: survey first appeared on The Sydney Morning Herald.

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