Polls of execs: Inflation will abate in 2023 though not to pre-pandemic level
Grocery shoppers have felt the impact of inflation this year. Credit: AP/Nam Y. Huh
Increases in consumer prices will moderate somewhat next year but won’t return to their pre-pandemic level, according to surveys of business executives in the metropolitan area and upstate.
Service-sector firms in the metro area will raise their prices by 4.7% in 2023, on average, compared with this year’s hike of 7.3%, based on a recent poll conducted by the Federal Reserve Bank of New York.
In a separate bank poll, manufacturers across the state said they planned to increase prices by an average of 5.4% in 2023 compared with this year’s hike of 9.5%.
The New York Fed surveyed about 125 factories and about 200 service firms Dec. 2-9, with Long Islanders participating in both polls.
The price increases of 2022 didn’t fully cover the businesses’ increased costs for materials, labor and other operating expenses, which were about 3.5 percentage points higher than what was charged to customers, the bank found.
In describing the factors that determine how much to charge customers, both factory and service firm executives cited demand for their product or service and labor costs most often.
“Service firms ranked competitors’ prices a distant third, while manufacturers’ third-ranking factor was non-labor costs, such as materials, energy, transportation and rent,” the New York Fed said.
In addition, executives were asked to predict what the increase in the national Consumer Price Index will be in 2023. The index tracks inflation by recording price changes in a basket of goods and services.
"Among service-sector respondents, the average expected inflation rate for the year ahead was 5.5%; among manufacturers, it was 6%," the bank said.
The price index is expected to end 2022 with an 8.6% increase. The index climbed 4.7% in 2021 and 1.2% in 2020, according to research from the Federal Reserve Bank of Minneapolis.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
Remembering 9/11: Where things stand now As we remember those we lost on 9/11, we're looking at the ongoing battle to secure long term protection for first responders and the latest twists and turns in the cases of the accused terrorists.
Remembering 9/11: Where things stand now As we remember those we lost on 9/11, we're looking at the ongoing battle to secure long term protection for first responders and the latest twists and turns in the cases of the accused terrorists.
