Inflation is here, and it is not because of Governments Printing Money

Price increases in raw materials are making everything more expensive.

Akis Apostolopoulos
The Entrepreneurial Thinker
5 min readMay 29, 2021

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Photo by Ibrahim Boran from Pexels

I run a small manufacturing business. Every week, another supplier will inform me of a price increase.

My suppliers of chemical raw materials are reporting massive shortages and delivering products 2–3 months late. I have been sourcing resins whose price for the last ten years fluctuated between 3.30–3.60 Euros/kg. For June I have been told that the price will be in the Euro 6.50/kg range! A doubling in the cost to produce my products means that I need to pass some of this increase to the prices of my products.

My supplier of packaging products (like cardboard boxes and stretch film) has increased prices by over 15% in the past three months. She blames increases in the cost of paper and plastic packaging.

My supplier of plastic pails has increased his prices by 20–25% this year. He blames increases in the raw material that is used to make PVC.

Metal is also in massive shortage. Any goods that contain metal have seen price increases.

And I bet most of you have noticed that gasoline prices at the pump are pretty high. In fact, in most countries, they have reached 7-year highs.

How does this affect the overall economy?

Many people who are not involved in industrial production think that this will not affect them. They are wrong. Manufacturers have already started increasing their prices to their customers. Slowly the increases will become visible across the board.

For example, when the cost of plastic increases, yogurt manufacturers will need to pay more for plastic cups. He will pass this price on to the grocery store, which will increase the final price on the shelf.

Now forget the yogurt manufacturer, and imagine all the consumer goods that require plastic to be packaged, from processed foods and drinks to kids' toys. Most of these products will see a price increase.

My local hardware store is reporting that standard electrical tools like drills and grinders are in short supply. Even those prices are on the up…

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Akis Apostolopoulos
The Entrepreneurial Thinker

I spend my days reading, thinking, and writing about Entrepreneurship. Owner of 2 Businesses. For my best stuff https://theentrepreneurialthinker.com/sign-up/