MarketCompanies want to reflect costs more

Companies want to reflect costs more

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An Ifo survey shows that German companies have so far only been slow and incomplete in passing on the rising purchase prices to their customers. This must change.


According to a survey by the Ifo Institute, German companies have so far been slow, and only partially, to pass on the rising purchase prices to their customers. Accordingly, companies transferred only 34 percent of their purchase prices in the last few months, as the Munich institute explained. They just want to change that in the coming months. They plan to increase the disclosure rate to 50 percent by April 2023.

In October, the Ifo Institute surveyed 6,500 companies from all industries.

Inflationary pressures may increase

According to the companies themselves, weak demand, competitive pressure and long-term contract conditions prevented them from raising prices. According to the Ifo Institute, the delay in transmitting purchase prices will have an impact on future price dynamics.

This situation is likely to lead to further inflationary pressure on consumer prices in the coming months.

Manuel Menkhoff, Ifo researcher

In the survey, Ifo researchers found significant differences in individual areas of the German economy. Accordingly, industrial companies plan to reflect the increases in energy, raw material and primary material purchase prices at most with 68 percent.

Strong differences in manufacturing

This is followed by the construction sector with 66 percent. Therefore, it is 53 percent in retail and only 36 percent among service providers.

However, Ifo experts were also able to spot large differences in the manufacturing sector. “In industry alone, the range extends from 89 percent for shoe and leather goods manufacturers to 38 percent for beverage production,” the statement says.

Source: ZDF

Ben
Ben
I am Ben Stock, a highly experienced professional with over 7 years of experience in the news industry. I specialize in market section writing and have published numerous high-quality articles on various topics under my name. My passion for journalism has helped me to develop an in-depth understanding of the industry, enabling me to stay up-to-date on all the latest trends and developments.

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