Customers walk away
"This is at the expense of companies' margins. This directly affects the health of the companies. To tackle this, raising consumer prices is the most obvious solution. But in practice, most companies cannot do that. Simply because the customer will go elsewhere."
Only 3 sectors are not under pressure at all
Euler Hermes also examined which sectors hardly suffer from the rising costs. For this, the economists developed their own index based on:
- short-term pricing power,
- demand elasticity,
- the trend in profitability,
- recent changes in input prices and
- the ability to compensate rising input prices through exports.
This shows that there are only three sectors that are not under financial pressure from rising costs: pharmaceuticals, computers and consumer electronics.