The Panic Button Is Pressed Down Hard

I get the distinct feeling that over the last few days and weeks the panic (or at least the 'worry quite severely') button has been firmly pressed. The reason? Well I've come to this conclusion from what people in different industries have said to me.

The GlassTalk forum has been deep in discussion about manufacturing price increases and the struggle to absorb them. The main example of this has been given by RCG. After whats seems to be many price increases, his company is now under great pressure to pass on these increases as absorption is an option which is increasingly difficult to choose. This sentiment has been backed up by many on the site, with the majority explaining that most manufacturers have upped their prices a few times already this year and are unable to take any more on the chin, so will have to raise their prices or risk their profit margins altogether. It's got that bad that, in RCG's words, "he's gone to the market place". Decisions like those aren't easy ones to make due to their size and implications.

A local DIY company today said that they are also incredibly quiet. They explained that the beginning of the year was good, solid, much better than the year before, but recently, and especially after the election, there has been a marked drop in trade.

And this is not restricted to certain industries. My girlfriend has been explaining to me today that things at the kitchen/bathroom parts manufacturing company she works for have suddenly tightened up in a big way. And that service and stock levels from their suppliers have dipped largely, as well as being given substantial and numerous price increases from all their suppliers.

Months and months ago, when the country was still in the tightest grips of recession, we were told that there would be adjustments, and that there will come a time where business in this country would go through change. Well I think that we are at that crunch time right now. The prices of everything from fuel to food, clothes, polycarbonate roofs, door panels etc have gone up, and in some cases dramatically. We are living in times where general costs will have to go up for a while. We have businesses now buckling under the pressure to pass on increases to the consumer, something they will have to do in order to stay in business. Plus, we have the emergency budget coming up next week. I foresee that being quite a painful listen, and will provide a tough back drop for the country over the next four to five years.

So, as you can see, you can tell why I think there is an air of panic and desperation setting in at the moment.