That’s how much many small- to mid-sized businesses plan to raise their customer prices over the next six months, new survey results suggest, showing consumers should brace themselves for steep inflation to continue.
Fifty-four percent of 500 business owners surveyed last month said they expected to increase their prices, and of those, 36% said they will raise prices by at least 5%, PNC Financial said Monday. While the survey last asked the same question in the spring of 2020—before serious inflation set in—previous survey results show that the last time this many businesses anticipated that steep of a price hike was in 2012.
U.S. households have seen their costs for groceries, gas, housing and other items soar this year, and this summer overall prices jumped more than they have since 2008, reaching a year-over-year inflation rate as high as 5.4%. Not only did consumer demand return, but fallout from the pandemic strained supply chains and created labor shortages, pushing businesses’ own costs higher. Indeed, the biggest factor cited by the businesses surveyed was “favorable market conditions,” followed by higher costs for materials and then for workers.
And now, as the holiday shopping season approaches, it looks like many consumers can expect things to get even pricier.
"Inflation is now a greater concern as price hikes are expected to keep up with higher input and labor costs,” PNC wrote in a report on the survey.
PNC, a Pittsburgh-based bank, commissions the survey twice a year. Artemis Strategy Group interviewed 500 U.S. businesses with self-reported revenue of $100,000 to $250 million between Aug. 2 and Aug. 31. The sampling error is plus or minus 4.4%.
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