Inflation may be receding in many segments of the economy but it is still a big concern for businesses.
When we hear talk of falling inflation, it tends to be related to consumer inflation or the CPI which is short for Consumer Price Index. In business, they often have different metrics to manage. And inflation is one of them.
That’s because businesses rely more heavily on loans or credit lines that carry floating interest rates, unlike consumers who have most of their debt tied up in fixed rate loans. Plus, the latest Raw Material Index which affects the supply chain was up four-percent which is nearly double the CPI. And…the wages they are paying employees rose by seven-percent from August to October.
So, as we move through the fourth quarter of the year, the cost of inputs remains high in measures related to business optimism.
Nonetheless, they remain fairly upbeat heading into next year with 60-percent saying sales will stay the same and one-in-six expecting sales growth.
