MADISON — Inflation is biting down even harder on businesses as they struggle with workforce shortages and the lingering effects of the pandemic, according to a new survey by Wisconsin Manufacturers & Commerce (WMC).
The Wisconsin Employer Survey found nearly half of Wisconsin businesses have seen costs soar by more than 10 percent, with 82 percent of employers reporting they have been negatively impacted by inflation. One in five companies has seen costs go up by more than 20 percent.
“Inflation is taking a toll on Wisconsin businesses and ultimately consumers,” said WMC President & CEO Kurt R. Bauer. “When companies are facing 10, 20 and 30 percent cost increases, it means consumers will be next in line for double-digit hikes. Unfortunately, we see no signs of inflation easing in the coming months.”
Wisconsin Manufacturers & Commerce — the combined state chamber and manufacturers’ association — conducted the survey over the last three weeks of January on a variety of topics. On Tuesday, WMC released data focused specifically on inflation and the supply chain. It follows data last week that showed business confidence is waning in the face of a persistent workforce shortage, supply chain challenges and historic inflation.
The release also follows Gov. Tony Evers’ recriminations of businesses in his State of the State address The governor accused companies of “squeez(ing) consumers for every extra penny, raising everyday costs for folks in Wisconsin and across our country.”
Scott Manley, WMC’s executive vice president of Government Relations, told Empower Wisconsin last week such assertions couldn’t be farther from the truth. The blame, he said, rests on the shoulders of big government and bad public policy.
“When you flood the economy with a bunch of printed money and increase demand for goods and services at a level higher than what the supply chain and our businesses can deliver and at the same time provide overly generous government benefits that encourage the unemployed not to work, that’s a recipe for higher prices and a broken supply chain.”
Wholesale inflation soared to 9.7 percent last month from the same time last year, according to the U.S. Department of Labor. The agency reported the producer price index jumped 1 percent in December. Prices for everything from groceries to gasoline are devouring personal earnings gains. And employer revenue.
Other data from the Wisconsin Employer Survey show supply chain challenges have yet to ease. Ninety-one percent of businesses have experienced delays or other challenges associated with their supply chain in the last year, according to the semi-annual survey.
Of those companies, 93 percent saw costs go up, nearly half had to turn down orders because of supply chain issues and some had to cancel product lines indefinitely.
“While hardworking Wisconsinites are facing higher prices on everyday items, lawmakers in Washington are just making the problem worse, “Bauer said. “The federal government has flooded the economy with trillions of dollars we don’t have, and President Biden is just accelerating inflation with policies that make it more expensive to fill up our cars and heat our homes.”