Private households are already moaning under the sharp price increases, but things are getting worse, warns purchasing expert Wolfgang Schnellbächer of strategy consultancy Boston Consulting Group (BCG). “The price increases we see on the producer side are far from reaching the consumer side.”
According to Schnellbächer, inflation will be passed on to households well into the next year. The expert said in an interview with the APA that you didn’t just start the war in Ukraine. “We already had significantly higher inflation rates in December, which were exacerbated by the deficit caused by the war in Ukraine.”
Producer inflation index up 30%
Because the information transfer on the producer side is not optimal and the managers are not used to dealing with such situations, the cost increases are passed on only gradually. The producer inflation index has risen by 30 percent, on the consumer side inflation is between eight and ten percent.
The problem in the corporate division is “that purchasing doesn’t speak to sales. That is a muscle that has not been used until now.” Prices are now being raised again in all kinds of sectors, from machine construction and engine construction to building materials. “I’ve talked to 43 companies in the past few weeks, all but one of them want to raise prices.” These price increases would be reflected in higher inflation.
‘Wage demands will still affect companies’
Also in wage negotiations, the actors should first get used to the new rules of the game. “Future inflation has already been factored in and proactively incorporated into the requirements. That’s something we don’t even know about yet and it’s fueling the spiral.” The services that businesses buy, such as IT services, have suffered the least from inflation so far, and here’s another catching up.. Businesses have yet to be hit by this new wave of inflation due to higher wage demands.
Schnellbächer assumes that the delayed pass-through of cost increases will continue well into the next year. “We still see letters from producers to other producers saying, ‘We need to raise prices, but we don’t know by how much.'”
The fact that disrupted supply chains are only very slowly returning to balance is due to their high complexity. “We work with such complex systems that the participants often don’t even know each other.” Calls for nationalization because the market has failed has nothing to do with Schnellbächer. “No state could organize that. Yes, we have these imbalances, but it still works surprisingly well.”
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
