(The Center Square) – Several manufacturing and business leaders are concerned about how inflationary pressures hurt businesses through heightened input and transportation costs.

Participants at a round table event on Capitol Hill Thursday said that inflation had increased the cost of raw materials, making it harder for manufacturers to obtain what they need to do business.

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“For manufacturers, increased raw material costs are the number one issue right now,” said Robyn M. Boerstling of the National Association of Manufacturers.

These heightened raw material costs have played a significant role in the recent price increases nationwide as manufacturers struggle to survive and pass on some of the heightened costs to their consumers.

“What’s driving these price increases? Obviously, raw material costs, freight and transportation costs, wages and salary, energy, [and] shortage of available workers,” Boerstiling said. “Yes, manufacturers are assuming those costs, but they are also being passed through.”

Uncertain about how inflation rates will continue to play out, businesses can no longer afford to establish long-term price commitments to their partners, making it harder to secure deals between companies.

“What we’re seeing and what we’re hearing from our partners is that suppliers are guaranteeing prices for shorter windows of time,” Shawn Wilson of the Louisiana Department of Transportation and Development said.

This uncertainty has contributed to higher prices as businesses don’t know what prices might look like shortly. 

“If we are not going to put the work in place, put the pipe in place, the steel in place, for two years from now, we’re guessing what the price would be and building that in our price,” George Palko of the Great Lakes Construction Company said. “Some of the terms and conditions put on by the truckers, put on by aggregate suppliers, concrete suppliers, putting on 20% per year escalators onto the first year price. So, we are adding 20% and 40%, and 60% onto their first-year price.”

Another pressing issue for manufacturers is high energy costs. According to AAA, the average national gas price is currently $4.61 a gallon, which is $1.46 more than the same time a year ago. Manufacturers say these prices need to come down as they have created many issues for the production and transportation of goods.

“We need to do everything we can to reduce energy costs because it is a huge driver of all the challenges that we face,” Boerstling said.


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