Rising Prices Threaten Profits

Rising prices for materials and services are squeezing business profits.

The Kiplinger Forecast (subscription required) predicts businesses of all sizes to be hit with higher prices for energy, steel and other metals, and trucking costs.

U.S. small businesses can also expect health insurance premiums to increase by about 15%, which is actually less than last year’s hikes of 20%.

The recent price rises in steel and building materials in the United States are something we have noted before here and here. But the problem is worldwide.

Take for instance, India. India has become a bit of a whipping boy in the U.S. over the past six months due to fears of offshore outsourcing. Yet, in the matter of rising prices, India is in much the same boat as the U.S., feeling a similar severe pinch with high steel and cement costs.

Similar stories are repeated around the globe. Brunei. Uganda. Canada. Thailand, Malaysia and South Korea.

What will all these rising prices mean? Lower profits for businesses, since they won’t be able to pass along price increases to customers until 2005. And rising inflation at the producer level.

Comment ▼

Anita Campbell - CEO

Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

Leave a Reply

Your email address will not be published. Required fields are marked *


Free e-Book: 8 Insights You Need to Know Before Choosing HR Software for Your Small Business

Learn how to navigate the HR software market, avoid getting oversold on unnecessary features and choose the right tools for your small business's unique needs.

No, Thank You