Higher energy prices have been consuming the profits of many businesses worldwide but now fears are being raised that manufacturers can no longer absorb these costs and will soon have to increase prices, leaving the consumer out-of-pocket.
The report from theglobeandmail.com suggests that whatever the industry the increase in electricity prices could have a massive impact on the price of inflation for many goods and services whatever the industry as manufacturers can not afford the rising costs anymore.
During March higher energy and fuel prices cause annual inflation to rise as much as 3.3 per cent in Canada which is the biggest increase in the last 2 and a half years the Bank of Canada has seen.
"What we're seeing is a bit of an echo in the big runup of producer prices that we witnessed three years ago, when oil got up to over $140 (U.S.) a barrel," said Doug Porter, deputy chief economist at BMO Nesbitt Burns in Toronto. "The runup in oil prices so far in 2011 is affecting not just raw material prices, but the broader industrial product prices as well.'"
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