The impact of rising energy prices on the profitability and competitiveness of Czech engineering

Research background: Rising energy costs have significantly affected industries in recent years. One of these industries is engineering, where energy consumption is a critical cost component. This has an intermediary effect on the profitability and competitiveness of engineering companies.Purpose of the article: The primary objective of this study is to analyse the relationship between the year-on-year evolution of energy prices and the financial variables of engineering enterprises in the Czech Republic. The research aims to determine whether energy price fluctuations nega-tively affect the profitability and competitiveness of firms in the engineering sector.Methods: The study uses correlation analysis to quantify the relationship between the evolution of energy prices in the Czech Republic and selected financial variables of engineering firms falling specifically in the CZ NACE-28 category for the period 2019–2023. The percentage evolution of energy prices and financial variables is subjected to statistical analysis to identify trends and de-pendencies.Findings and value added: The correlation analysis confirms a strong positive relationship between energy price growth and production costs. In contrast, the analysis indicates a strong negative correlation between energy prices and gross margin or EBITDA. These findings suggest that energy price volatility poses a certain financial risk for engineering companies. The study also provides valuable insights for firms seeking to optimize energy efficiency and invest in alternative energy sources to alleviate cost pressures. The results contribute to the debate on sustainable industrial strategies and financial resilience to rising energy costs.