Producer inflation on the way to the household table The industry is under pressure of 28% inflation; The services are getting more expensive, should we wait for another price increase?
The inflation data of the producers in the summer show the continuation of the price pressure on the companies. Despite the relative decline in growth acceleration compared to the spring, seasonal inflation for industry reached 28% and services reached 16.4%, showing that production costs remain at very high levels.
A long-term analysis indicates a more serious fluctuation of inflation in industry against the always positive trend of the service sector. The setting of the high records in the spring was caused by tensions, and the slight decrease in the data in the summer never means a drop in prices, but only indicates a slowdown in the acceleration of inflation.
The producer inflation index as a driver of price changes reflects the costs imposed on production before the goods enter the consumer market. The increase in this rate in the service sector usually reaches the final table of the households much faster and more directly, due to the very short time interval between production and consumption.
Increasing liquidity, general inflation and negative expectations are the main drivers of price jumps. Meanwhile, the disruptions on the supply side, including the surge in the price of foreign exchange, the difficulty in supplying raw materials, the increase in wages and the increase in the costs of fuel and rent, put additional financial pressure on the producers of goods and service providers.
The occurrence of two consecutive wars and the consequences of the naval blockade caused serious damage to the industrial infrastructure and disrupted the supply chain. The continued difficulty in importing inputs and the sharp increase in insurance and transportation costs will soon lead to a new wave of expensive consumer products on the Israeli market.
Read the details in Akhtaznews.