A total of 59% of U.S. CEOs think consumer and producer prices will continue to rise at least into next year, according to a Conference Board survey.
The inflation juggernaut doesn’t look like it’s going away anytime soon. A total of 59% of U.S. CEOs think inflation will last at least into next year, according to a Conference Board survey.
“To cope with rising inflation, [CEOs globally] plan balancing actions that include cutting costs, passing increases downstream to consumers and end users (the strategy most favored by U.S. CEOs),” the report said.
It also said CEOs plan to “absorb price increases into profit margins, though there are currently few signs that CEOs are willing to take this action.”
In a sign of how suddenly inflation worries emerged, it was ranked by global CEOs as only their No. 22 biggest concern last year. So it’s no wonder the report shows that under 40% of CEOs believe their organizations are “well prepared” for an inflation-related crisis.
U.S. consumer prices soared 7% last year, the biggest 12-month increase in 39 years.
Despite the increased agitation over rising prices, U.S. CEOs they don’t see inflation as the No.1 external threat to their businesses this year. That’s labor shortages. No. 3 is supply chain disruption, followed by Covid-related disruption and cybersecurity, with recession risk and regulation tied for sixth.
The news for many companies obviously isn’t pretty on the labor front. “As bargaining power shifts from employers to workers, companies should prepare for higher wage and benefit costs along with increased turnover in 2022,” the report said.
“A wage-price spiral—where higher prices and rising wages feed each other, leading to faster increases in each—may already be in the works in some industry segments or regions within economies.”
