Companies are suffering from massive inventory buildups due to a lack of consumer demand, raising storage rates. In turn, prices for products in the supply chain are beginning to rise again.
Logistics issues suggest inflation will continue on the goods side.
“National warehousing capacity remains low and will remain tight for the foreseeable future as U.S. industrial construction starts have fallen considerably year-over-year due to rising interest rates,” Chris Huwaldt, vice president of solutions at Warehouse Quote, told CNBC.
Forty-seven percent of small business owners do not believe that supply chain inflation has peaked, according to the report.
Supply costs are also expected to remain inflated due to contract terms set with suppliers before disinflation and companies’ desires to maintain profit margins.
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