Manufacturers increasingly worried about rising inflation

on Wednesday, April 27, 2011

Manufacturers increasingly worried about rising inflation  As U.S. companies began announcing their quarterly earnings last week, analysts were interested to see how their margins stacked up amid rising consumer prices and weak, though consistent, economic growth. Manufacturers are increasingly growing concerned about inflation, according to a recently released report.

MarketWatch reports that manufacturers reported solid growth during the first three months of 2011, but that a majority of that expansion comes from overseas. Further, inflationary pressures that are starting to eat into margins are worrying executives.

Manufacturers have benefited from a historically weak dollar that has helped make American-made goods more competitive abroad. However, the sinking greenback is also boosting commodity prices and spurring inflationary concerns, according to industry watchers.

In its quarterly earnings report, consumer products giant 3M said inflation is hovering around 4 percent, and while inflation hasn't had too big of an effect yet on its business, it projects consumer prices to continue to rise as the dollar declines against a basket of six major currencies.

In fact, some analysts are so concerned about surging commodity prices and rising inflation rates they project the industrial sector to decline - rather than grow - through the rest of the year.

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