J.P. Morgan: US small businesses plan to pass on higher costs to consumers

J.P. Morgan: US small businesses plan to pass on higher costs to consumers

20 september 2021

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Recent survey data from the National Federation of Independent Business show that small businesses in the US are planning on raising prices against a backdrop of strong demand and supply constraints.

Many companies are desperately struggling to hire staff and job openings are at a record high. This apparent shortage of labour is leading businesses to have to increase wages in order to attract and retain workers. This, combined with the rising costs for raw materials and logistics, has put pressure on input costs.

However, the strength of consumer demand relative to what businesses are able to supply means that they are comfortable to pass on these higher costs to their customers. So long as businesses can continue to grow revenues more quickly than input prices rise, then profits will continue to improve.

% of responding firms

2009 J.P. Morgan

Source: NFIB, Refinitiv Datastream, J.P. Morgan Asset Management. Data as of 17 September 2021.

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