Euro zone industry is already shrinking. Energy costs haven’t even hit yet.

Euro zone industrial output started 2026 in contraction — and that was before the full weight of the current energy price surge landed on the books. Manufacturing PMI data shows output declining even as gas storage sits at its lowest levels since the 2022 crisis. The squeeze hasn’t fully arrived yet. It’s warming up.

What this means for your operations

Most businesses will feel this as a general tightening. Revenue stays flat or dips. Costs rise. Margins compress. The instinct is to cut across the board and hope for a recovery.

But here’s the problem with across-the-board cuts: they assume every product line, every process, and every shift is equally affected. They’re not.

At €0.32/kWh — where German industrial electricity is heading — some of your products are still profitable. Some just crossed the line into loss-making. And some have been quietly bleeding margin for months, hidden inside a total energy bill that doesn’t break down by process.

Without a baseline, you can’t tell which is which. You’re making decisions about what to cut, what to keep, and what to reprice based on a feeling instead of a number.

The tactic

Calculate your breakeven energy price per product line.

Here’s how:

1. Take one product line — your highest-volume one.
2. Pull your energy bill for the last full month.
3. Estimate what share of that energy goes to this product line (by shift hours, machine runtime, or floor space — whatever gets you closest).
4. Divide that energy cost by the number of units produced.
5. That’s your energy cost per unit.

Now ask: at what energy price per kWh does this product stop being profitable? That’s your breakeven.

Do this for your top 3 product lines and you’ll know — not guess — which ones survive a price spike and which ones don’t.

The free tool

We built a calculator to do this: the Breakeven Energy Price Calculator. Plug in your numbers, get your answer. This finds the gap. The Modern Ops Program closes it.