SuppliersGlobal shutdowns and labor shortages have hampered supply chain movement and caused permanent bottlenecks at ports from China to California.

Results from Procter & Gamble Co and Danone SA as well as phone maker Ericsson on Tuesday show rising costs and supply chain disruptions, indicating more margin pressures for global companies and higher prices for shoppers. Panic buying at the start of the pandemic led to massive shortages of everything from toilet paper to canned food. Global shutdowns and labor shortages have hampered supply chain movement and caused permanent bottlenecks at ports from China to California.

Many companies have relied on price increases to offset higher prices for materials needed to make and ship basic necessities like diapers and bottled water. Executives and analysts said the price increases will continue into the coming year. Procter & Gamble, which has cited shrinking operating margins for the first quarter, now expects expenses to be about $2.3 billion this fiscal year, compared to a previous forecast of about $1.9 billion.

The company blames rising raw material costs as well as diesel and energy prices, and said it doesn’t expect these problems to go away any time soon. Danone, which sells Activa yogurt and Evian bottled water, warned of rising inflationary pressures next year after sticking to its 2021 forecast on Tuesday, vowing to protect its operating margins through productivity gains and price increases.

“Like everyone across the sector and beyond, we see inflationary pressures across the board. What started with rising material cost inflation has evolved into widespread constraints affecting our supply chain in many parts of the world,” said Jürgen Esser, Danone’s chief financial officer. the scientist.

“In the late third quarter, we saw some impact on sales from disruptions to the supply chain, and such issues will continue to be a risk,” CEO Bory Ekholm said in a statement. The company has not been able to deliver certain devices to its customers. She said that because of the lack of chips in suppliers, coupled with logistical problems.

Electric car maker Tesla is due to announce its results on Wednesday. Investors are closely watching the automaker’s margins. CEO Elon Musk previously said the company is spending heavily on moving auto parts around the world to meet demand, while at the same time cutting costs at its factory in China by making more local parts available.

Some investors want to see how these costs stack up. “I think there will likely be headwinds for margins. They are paying more for components,” said Gene Munster, managing partner at venture capital firm Loup Ventures, an investor in Tesla. “I think that would be very positive if they could increase the Gross profit margin for cars in this environment.”

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