More than 3/4 of medium and large companies (76%) announce price increases in the next 12 months, according to Grant Thornton’s “International Business Report” study. This would translate into the average annual inflation of around 16%.
Importantly, so far our index of companies’ propensity to raise prices effectively forecasted inflation, i.e. it was strongly correlated with the later actual readings of price dynamics. If this correlation were to continue, the average inflation in 2023 would be around 16% in the next 12 months. taking into account that from January to September 2022 the average price dynamics was 13.3%, this would mean that 2023 will be even worse than the current one, and individual inflation readings could sometimes exceed the level of even 20%, according to the report.
According to the report, 85% of medium-sized and large companies say high energy costs are a “strong” or “very strong” barrier to growth. A year ago, 67% of companies thought so, and in 2016 – 16% of companies.
Secondly, with rising inflation and low unemployment, pressure from employees to raise wages is growing, and employers have no choice but to accept these increases. Therefore, labor costs are rising. According to our study, they are already a barrier for 81% of the surveyed companies, i.e. by far the most in history, the report reads.
Out of 29 countries covered by the study, three had a higher percentage of medium and large companies planning price increases than in Poland; these are Argentina (82%), Nigeria (79%) and Ireland (77%), also reported. The lowest results were recorded in Asian economies – South Korea (35%) and China (38%).
The average percentage of companies planning to raise prices in the next 12 months has increased from 32% to 53% over the last two years. This is slightly less than in Poland (from 40% to 76%), but the change is very visible globally. the percentage of companies planning a raise was recorded in Ireland (from 23% to 77%), Greece (from 17% to 65%) and Sweden (from 35% to 74%). The smallest in South Africa (from 56% to 59%), in the Philippines (from 49% to 53%) and Thailand (from 41% to 45%), the report reads.
The survey commissioned by Grant Thornton International as part of the International Business Report cycle is carried out every year among 10 thousand. owners or board members of medium and large enterprises in the world. In Poland, since 2020, the survey is carried out using the CATI method (telephone interviews) by the Biostat company, every year among the owner and management board members of 100 medium and large enterprises. The last edition of the study was conducted in September 2022.
Source: Grant Thornton and ISBnews
