Since the beginning of the year, the prices of certain raw materials or processed products have risen due to a large number of intertwined factors. An increase that increases the risk of shortage. Overview of the sectors concerned.
It is more than three years since France had experienced such high inflation. Traditionally accustomed to slight variations – though characterized by a few upheavals, which are mainly linked to the oil price as in 2018 – France and the rest of the world are perhaps heading into a slightly more sensitive situation. In September, consumer prices rose a further 2.1%, according to INSEE’s first estimate.
Rising energy and commodity prices
If central banks continue to focus on temporary inflation, according to the IMF, inflation should peak globally by the end of the year before stabilizing in 2022.
Why temporarily? Because it is above all due to a sharp increase in energy: gas, oil and now electricity. There are many reasons (economic recovery, geopolitical tensions, etc.), but the facts are there.
Other raw materials are also affected, such as common wheat (which is used to produce flour), which suffers from the poor harvest of the year. Soybeans, sugar and coffee are also being sucked into this upward spiral, especially as maritime transport is experiencing an unprecedented traffic jam, which is driving up prices even more.
A lower supply than demand leads to shortage or risk of shortage. Here’s what’s missing at the moment and what may be missing in France.
Desperately looking for semiconductors
They are small but remain the cornerstone of all electronic products. Semiconductors are terribly lacking in all manufacturers, starting with car manufacturers, who now have to interrupt the production of vehicles at certain factories, due to the lack of these famous electronic chips. And this shortcoming should persist: Demand is strong, and production sites, mainly in Asia, are facing epidemic reversals from Covid-19. Normalization is not expected this year, while Europe wants to consolidate a sector on the continent in the coming years.
Paper at gold price
Following the pressure on the price of wood, the paper industry is grinding its teeth. Whether it is toilet paper whose production costs have increased by 30%, or stationery, the consequences will be a likely increase in prices and longer delivery times. Ultimately, this lack of paper does not mean empty shelves for hygiene products, but probably difficulties for the publishing world, which risks reducing the number of prints, more due to sky-high prices than lack of raw materials.
The furniture giant Ikea is also facing a shortage of stock. Shelves, chairs, baskets … About 10% of product references are missing in stock. The reasons are more and more: the Covid-19 crisis, the difficulties of sea transport, lack of raw materials … Surprising fact: the famous PAX wardrobe is currently produced only in white to facilitate production. Other large chains, such as Conforama, nevertheless ensure that they do not yet experience these difficulties.
Materials are waiting on the construction sites
Wood, concrete, plastic, steel … construction sites are idling due to lack of materials whose prices have risen this year. Result: activity has not returned to the level in 2019. At the beginning of the month, the French construction federation estimated that 15% of companies struggled to continue at least one construction site during the summer.
“It is not a scarce commodity, for the products there are still some, but there are big problems in terms of prices,” nevertheless its President Franck Bernigaud stressed.
Fear of textiles
Shoes and clothes may run out by the end of the year in Europe. Nothing to worry about, but some brands expect strong tensions by the end of the year. This is especially the case for Nike and Adidas, which manufacture a large part of their products in Southeast Asia and especially in Vietnam. However, the country is experiencing new cases of Covid-19, which is slowing down the textile factories. Some models could therefore be missing at the foot of the tree, while prices could rise for others.
The shoe is not the only one that is concerned. On the side of Etam, items and sizes “from today” are missing in stores, this week the co-manager of the company, Laurent Milchior, warned on the set of BFM Business.
The bike slides
Mainly produced in Asia, bicycles are also missing. Faced with both a shortage of components, raw materials and rising freight prices, the sector is suffering the blow of delivering customers drop by drop. A situation that should at least last until next year.
The lack of toys is no longer fun
Three months before Christmas, the question gradually begins to bother parents. Will they be able to respond positively to the list of Santa Claus? Again, the two global sector giants Hasbro and Mattel had warned of shortages.
At BFM Business, the CEO of Jouéclub was reassuring this week. “We started a year ago, we anticipated a number of Covid-related issues, and we were expecting deliveries. Compared to the same date last year, we have about 20% more inventory in stores,” explains Jacques Baudoz.
Same story with competitor PicWicToys. “There will be a little shortage of toys at Christmas, a little more than in other years, but there will be toys for children. There will be no problem with the amount of toys in general,” said Romain Mulliez, president of PicWicToys and co . -president of the Fédération des Commerces specializing in toys and children’s products.
What not to miss
The fear of chain shortages must still be weighed. If some prices can rise, it does not mean empty shelves, as is the case in the UK, for example. Thus, there will be no shortage of pasta, flour or toilet paper because these products are made in France. So no delivery problems.
Similarly, no power outage can be expected thanks to the French energy mix (mainly nuclear), while natural gas reserves are now full, unlike some of our neighbors. Gasoline, if it could cost more, should not be lacking either. This general overheating of prices is expected to subside during 2022.