Let's Talk Business: Inflation and Business
Prices continue to rise as year over year inflation numbers grow to 8.5 per cent in March, businesses will want to stay on top of news and trends.
With inflation continuing at a rapid pace, businesses are feeling the impacts as they try to navigate the changing environment. As we keep an eye on future inflation trends, experts with Deloitte have identified some key issues to monitor as 2022 continues:
First, is the continuation of supply chain disruptions and the limited availability of both raw and finished goods. This will impact businesses in a variety of ways including a continued rise in prices. Keeping an eye on your businesses supply chain plan and looking for new opportunities can help stabilize your business cost.
Next, inflation is expected to have a continuing impact on wage negotiations. The Bureau of Labor Statistics released the employment cost index for the first quarter of 2022 last week. According to the BLS, wage changes grew by 1.4% between January and March, marking the largest one-quarter increase since they began collecting this data in 2001. As labor shortages continue to be a problem, attracting new talent will require creative thinking, and remember compensation doesn’t just have to be a wage discussion.
Finally, consider how consumer spending habits are evolving, with rising prices and changing priorities. Consumer are beginning to shift their spending plans, consider your customer base and how you can respond appropriately to this change.
Following the news and communicating with your business peers will help keep everyone informed and reacting as best we can.