CME releases statement showing impact of high costs of raw materials for manufacturers
by CM Staff
CME says that increasing the supply-side of the economy is not only fundamental to growth, but it also helps create a more inflation-resistant economy.
OTTAWA — According to CME, today’s 100-basis-point rate hike from the Bank of Canada that is aimed at slowing inflation and soaring prices, are profoundly affecting Canadian consumers as well as the country’s manufacturers.
A new Canadian Manufacturers & Exporters (CME) infographic shows the impact on manufacturers of the sustained high costs for key raw materials, such as crude oil, natural gas, wheat, and forestry products.
CME says the raw materials price index for May was up 37.4 per cent from a year ago and has now risen by two-thirds since January 2020.
Along with these escalating costs, manufacturers are also grappling with other significant challenges, including supply chain bottlenecks, labour and skill shortages, and heightened global uncertainty.
According to CME, this is leaving manufacturers with no choice but to pass on some of the additional costs to consumers. This is one of the factors driving high consumer price inflation in Canada.
Higher interest rates curb inflation by reducing demand for goods and services and slowing the economy down.
But in tandem with the Bank of Canada’s actions, policymakers must do all they can to build a more productive economy with greater capacity to deliver goods and services to Canadians.
Increasing the supply-side of the economy is not only fundamental to growth, but it also helps create a more inflation-resistant economy.
“Canadian manufacturers are feeling the pain from these rapidly increasing costs and are ready to do their part in the fight against inflation. But this will take concrete steps from governments to help the industry get the workers it needs, improve the environment for business investment, and accelerate spending on critical infrastructure, said Dennis Darby, CME President and CEO.
Added Darby, “We want to strengthen our sector and see it grow so it can continue to drive our economy, improve prosperity, and build long-term resilience against future shocks.”
