Energy Inflation Introduction:
Since 2022, the war in Ukraine has highly affected the cost of living for people but also the cost of running a business in many industries such as the food, manufacturing & high cost energy business like cloud servers.
Food increased by 0.3% over one month, it increased by 13.7% over one year. It is what generates nearly half of global inflation.
This upward phase does not seem to have yet to end, with increases that have delayed repercussions during the periodic negotiations of contracts between suppliers and distributors.
Energy increased by 0.1% over one month, over 12 months it fell by -3%
It does not seem likely to rise too much anymore, but prices remain at high levels.
Business Expenses:
The cost of running a business has highly increased as well due to the raise of the energy but also supplies & wages.
The revaluation of the SMIC has the effect of increasing the cost of labor and, by ricochet effect, reducing the profits of companies in an already very degraded economic context.
Some companies practice a system of remuneration indexed to the minimum wage. Thus, the base salary of other employees evolves at the same rate as the SMIC in order to avoid inequalities and loss of purchasing power for more qualified employees whose remuneration exceeds the minimum wage. This remuneration system has an even greater impact on the salary cost of the company, because the salary of all employees is increased with each increase in the minimum wage.
Additionally some other expenses for businesses like a restaurant design have a strong impact on profitability. The cost of running a commercial chest freezers for sale or a commercial fridges can go up to 50% in the past 12 months.