I spent the last two days raising prices to all of my customers (manufacturers in a variety of industries). Our costs have increased as much as 40% since May 1. Today I increased prices between 8 and 14 percent, with this being the fourth and largest price increase this year. In some cases, this has equated to 50-60% for the last year.
Dow Chemical has increased their prices 45% since May 1, with a 8% fuel surcharge, due to the squeeze on their profits. Dow’s competitor in one of the markets has decided to quit doing business because even with the potential for a price increase there is no profit left in the business. Dow’s business affects everything from shampoo to building supplies to fertilizers.
Rohm and Haas closed two plants, laid of 1200 workers in anticipation of a slowing US economy. They are now telling you what your price is for their products as much as two weeks after you have received it. Don’t want to do business that way, don’t call them.
Today it was announced that orders are up for June, but I sure much of this is to head off the July increases. I had a great day yesterday (June 30), but it may be the last good day for a while.
It is a scary time for manufacturing in the US. Most of these prices will not reach the consumer until fall. At that time, it could bring many of the manufacturers to a standstill.
It was bad in the early 70’s, but at that time you knew the business would eventually be back because there was no where else for it to go.
This time it may be different.