Manufacturing Execs Say Higher Prices Ahead

Chicago, IL, April 26, 2011 -- In a national survey of U.S. manufacturing chief financial officers and senior controllers conducted by Grant Thornton LLP, 66% say that their company intends to raise the sales price for their goods over the next six months thanks mostly to rising raw materials costs.

That's up from 35% six months earlier and a sign that inflation may pick up soon.

“This was to be expected given the increase in commodity raw material costs experienced by most manufacturers over the last 12 months” said Wally Gruenes, Grant Thornton’s national managing partner for Consumer and Industrial Products.

“With the precipitous increase in these commodity prices in recent months, manufacturers have no choice but to pass along such increases to their customers. While they have done a good job of improving operational efficiencies and driving down costs over the past three years, manufacturers simply could not drive down their conversion costs enough to absorb these raw material price increases.”

When asked about specific pricing concerns, 96% identified raw materials (e.g., cotton, metals, petroleum-based product), up from 62% six months earlier; and 58% identified energy, up from 33% six months earlier.

Also, 47% intend to add employees (up from 18% six months earlier), and 58% are optimistic about their own company over the next six months (up from 35%).