Inflation pressure triggers uncertainty and volatility for manufacturing sector
-Rebecca Reed Rapidly rising costs for businesses, a lack of skilled and unskilled workers, increasing inflation and shipping delays are putting huge pressure on New Zealand’s business environment and the consumer is about to feel it. The latest Hutt Valley Chamber of Commerce Business Confidence Survey found inflationary pressure is increasing and between a third and a half of all businesses are expecting to increase their prices in the next 3 to 12 months. It also found more than half of all businesses are expecting increased costs, yet less than 25% are expecting increasing profitability. Covid-19 economic impacts, growing concern around government policy and labour shortages are holding businesses back nationally. The survey shows labour shortages as the single biggest barrier to business for more than 60% of businesses. This is at unprecedented levels. “The business environment continues to be increasingly difficult – while the economy has rebounded strongly and demand continues to be strong, the ability for firms to deliver is fraught with a wide range of risks and cost increases. “These cost increases and risks are more widespread across business type and size as all companies try to adapt to the rapidly changing business environment,” said Helen Down, Chief Executive of Hutt Valley Chamber of Commerce. Down says she is hearing from businesses unable to commit to fixed prices or a delivery timeline due to the totally uncertain environment. “This time last year our survey found business owners were experiencing small increases in costs and holding prices but now costs are increasing rapidly, and the consumer is only just starting to feel it. The situation is set to deteriorate quickly when businesses are forced to not only increase prices but not even commit to a set price in the next six months,” said Down. The Wellington Electric Boat […]