Wood could still become a third more expensive by the end of the year, steel by a quarter, plastic by at least 20 percent. Sudden price increases to remain normal even after Covid, intelligent pricing strategies required.
The coronavirus crisis has severely unbalanced the supply and demand of raw materials for the production of durable goods. While manufacturers had to scale down production and inventories due to the pandemic, demand for furniture and other furnishings as well as construction and renovation materials for interiors and exteriors increased. In addition, unfavorable natural events such as extreme drought or damage caused by bark beetles have led to bottlenecks, especially in the recent past. Supply chains that had been interrupted or disrupted by lockdowns had to be successively reactivated. The "icing on the cake" was the Suez Canal traffic jam and the blockade of one of the world's largest container ports in China. As a result, commodity prices have almost exploded. On average, there have been price increases of 30 percent since the fall of 2020 and 20 percent since the beginning of the year - with peaks of 65 percent for secondary metal raw materials, for example.
As a recent Horváth study of more than 1,000 executives from manufacturing companies in twelve European countries now shows, manufacturers do not expect the price spiral to end in the medium term either. Quite the opposite: Whether wood, steel or plastics, gas or methanol - for almost all raw material groups, the affected industries are assuming further price increases in the double-digit range.
Read our latest Horváth study to find out what price increases manufacturers across Europe are expecting in the various raw material groups - and learn which pricing strategies prepare you from greater losses.
