(The Center Square) – Businesses across the country, especially those in North Dakota, are the recipients of some of the pandemic’s worst freebies, including continued supply shortages and rising bid prices.
The March producer price index, a measure of supply conditions in the economy, rose 1.4%. Strong consumer demand is colliding with the ongoing supply chain crisis, driving ever-higher prices.
“Supply chain shortages are having a significant impact on the energy and agriculture sectors in North Dakota,” Bette Grande, co-founder and CEO of the Roughrider Policy Center, told The Center Square. “Machinery, parts, pipes and other equipment and materials needed for these sectors are delayed or unavailable. Those that are available have significantly higher costs that will be passed on to the consumer.”
Alison Ritter, state director of the National Federation of Independent Businesses of North Dakota, told The Center Square that most small business owners, 77%, said inventory, supplies and equipment helped substantially to rising costs. Another 77% of small business owners said rising gas prices are forcing them to raise costs.
Grande said higher energy costs, especially diesel and fertilizer, will increase the cost of transporting wheat, soybeans and other commodities.
“Rising costs and supply chain issues will impact producers and ultimately be passed on to the consumer,” Grande said. “Labour issues are also impacting businesses in North Dakota, which will both limit the production of goods and increase the costs of anything produced.”
Ritter said that with rising costs, small businesses have had to pass their costs on to their customers.
“Inflation is a major issue right now that everyone in North Dakota is impacted and feeling in their pocketbooks. However, when small business owners pay more due to supply chain issues and inflation, that increase has to be offset elsewhere — or you could soon see more mom-and-pop stores in your neighborhood closing their doors,” Ritter said.
Although the cost of living in North Dakota is low, this is not a welcome trend.
“Producers and suppliers don’t have a bucket of cash to absorb the increased costs,” Grande said. “They will have to be passed on to the consumer, and we are already seeing that.”