Bloomberg News

Raw Material Prices to Continue Rising, Companies’ Survey Shows

November 24, 2011

Nov. 24 (Bloomberg) -- Raw material costs will likely continue rising in the next 18 months, hurting companies’ profitability further, according to a survey of European executives.

“Population growth, natural disasters and shifts in the balance of political power are causing a systematic shortage of raw materials and supply ‘bottlenecks,’” a Cologne, Germany- based procurement consultancy Inverto AG said in a report e- mailed today. “Businesses feel powerless to control the effects.”

Raw material costs affect companies’ performance more than economic pressure and competition, according to the report. Sixty-eight percent of 184 chief executive officers and purchasing managers in Europe polled by Inverto online said raw material prices are hurting financial results. That has led them to raise prices, with 61 percent passing costs on to consumers.

Eighty-three percent of the CEOs and purchasing managers expect raw material prices to continue increasing, according to the report.

--Editors: Sharon Lindores, Dan Weeks

To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net

To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net


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