Unprecedented Inflation? That's What CEOs See
No, prices aren't spiraling the way they did in the 1970s. But expectations matter and manufacturing CEOs are speaking a different language than investors.
Inflation has been worse, but ask CEOs and they’ll tell you it’s as bad as it’s ever been.
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Leaders of the top U.S. industrial companies gathered virtually this week for the annual Morgan Stanley Laguna conference. Unsurprisingly, much of the discussion centered around the rising cost of raw materials, labor and logistics and the increasingly difficult challenge of getting enough supply to keep up with demand. “The inflation is unprecedented,” 3M Co. Chief Financial Officer Monish Patolawala said at the conference, warning that the impact from higher input and freight prices on its 2021 earnings would now be at the higher end of the range the company gave in July. Trane Technologies Plc’s CFO Chris Kuehn echoed the sentiment: “Unprecedented is the word we’d use around the inflation side,” he said. After a series of similar presentations, Morgan Stanley analyst Josh Pokrzywinski joked that attendees could check the word “unprecedented” off their bingo cards.