Businesshala News Exclusive | Inflation Surge Is on Many Executives’ List of 2022 Worries

- Advertisement -

Covid-19 disruption remains top threat globally, but US CEOs more concerned about rising prices, labor shortages this year, survey finds

- Advertisement -

“Inflation Is Here,” Honeywell International Inc.

- Advertisement -

Chief Executive Officer Darius Adamczyk said in an interview. “We have to be very, very careful how this is resolved, because it’s a little bit like driving your vehicle. If you brake too hard, we can see the other side of inflation, which is a recession. “

Business leaders have been warning about inflation risks over the past year, even as Federal Reserve officials and most economists largely downplayed the breadth and firmness of rising prices. On Wednesday, the US Labor Department reported that inflation ended 2021 at its highest level since 1982, with the consumer price index up 7% in December, compared to 6.8% in November a year earlier.

- Advertisement -

The survey found that how big the disruption related to COVID-19 is for global officials varies by geography. US CEOs cited labor shortages as their main external concern for the coming year, followed by inflation and supply-chain problems. Kovid-19 came at number four.

Similarly, the European CEO ranked inflation as the top concern and the Covid-19 disruption at 10th place, below the regulator’s expected impact. But CEOs in both China and Japan see the biggest impact of Covid-19 on their businesses this year.

The pandemic’s ranking in Asia helped it top the list of concerns among all CEOs surveyed globally, followed by rising inflation and labor shortages.

Conference Board Chief Economist Dana M. Peterson said the disparity is partly explained by differing policy responses to the pandemic, with countries in Asia more likely to use shutdowns to contain the virus, while Europe and the US generally try to stay afloat. are doing. Open using vaccines, testing and masking policies to prevent outbreaks.

“It’s a very different approach to managing the virus and what that means,” she said. China’s large manufacturing base cannot work from home, while the US economy is more service-focused. “It makes sense to me that for China the Covid disruption would top the list, whereas in the US, labor shortages are the subject du jour.”

The survey was conducted in October and November, in which more than 1,600 C-suite executives, including 917 CEOs, responded. Although the data was collected before the start of Omicron’s outbreak, the survey authors say the answer likely won’t change much, as companies were dealing with the delta version in the fall and the latest wave didn’t cause panic or widespread shutdowns. has done.

Earlier this week, an annual risk report by the World Economic Forum showed a significant increase in pessimism about global prospects, with officials and leaders worried about a long-term fallout from the pandemic. Many respondents expected the next three years to be characterized by constant volatility and surprise.

In a conference board survey, 82 percent of CEOs globally said they are facing upward pressure for input into their businesses. In China, producers are facing rising commodity prices in their vast manufacturing base, while Europe is seeing inflation related to energy and food prices. In the US, 59% of CEOs expect inflation to pick up at least through the middle of 2023 or beyond.

“We have to catch this tiger before we can catch it,” said Gerald Walker, CEO of the US unit of financial firm ING Grop NV. “It ain’t pretty when it goes wrong.”

Mr Walker said the costs of inflation can be difficult to pass, especially in the banking world. “Margins don’t increase because I’m paying people more,” he said in an interview. “There are certain things about which we have to be quite careful, as it can erode the returns and profitability of organizations and it can also be structural rather than temporary.”

When it comes to its internal focus for the year ahead, CEOs across sectors said that attracting and retaining talent is a priority. The group also acknowledged that remote work will continue to play a more prominent role once the pandemic subsides.

Globally, a third of CEOs expect at least 40% of their post-pandemic workforce to be remote, defined as working at least three days a week outside of the physical workplace. Among US CEOs, 53% expect at least 40% of workers to work remotely.

The new flexibility comes at a time when continuing labor shortages are prompting US companies to be creative in recruiting new employees. This demand is driving up wages, a contributor to inflation that the survey authors expect supply-chain problems to last longer.

“Wages and benefits and attracting and retaining workers, as well as all costs, will continue to be under pressure,” Ms Peterson said. “Businesses are saying, this is going to be a problem not only this year, but next year and probably beyond.”

Write Thomas Gritta [email protected] . Feather


- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox