NY Fed: New York factories, retailers, service firms planning price hikes
Manufacturers, retailers and service firms polled by the Federal Reserve Bank of New York said they would hike prices at least 5% in response to rising costs. Credit: Bloomberg/Angus Mordant
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Executives at manufacturers, retailers and service firms polled by the Federal Reserve Bank of New York said inflation is driving up their costs — and they intend to share some of the pain with their customers — which could mean higher prices for consumers.
In one of two surveys conducted last month by the New York Fed, manufacturers across the state indicated that they are planning to raise their selling prices by an average of 5.4% this year in response to increases in the cost of raw materials and employee wages that average 7.3% compared with last year.
The second survey found that service firms and retailers in the metropolitan area expect to raise their prices about 5% this year, on average, in response to cost increases of 5.7%, according to the results, which were released on Wednesday.
The New York Fed polled executives at about 100 factories and about 200 service firms and retailers, respectively, from Feb. 3 to Feb. 12. Long Islanders participated in both surveys, but the identities of the participants were not disclosed by the bank.
One local business leader told Newsday the results highlight challenges to continued economic growth in Nassau and Suffolk counties.
Matt Cohen, president and CEO of the Long Island Association business group, said companies are facing an “uncertain operating environment” while “also bracing for the impact of tariffs."
He added, "Although our private sector is nimble and innovative, this confluence of factors presents a daunting challenge to our regional economy."
The price hikes by manufacturers would follow increases of 3.2% in both 2023 and last year, when some manufacturers paid substantially more for aluminum, copper, electricity and shipping. Food producers had to spend more on chocolate and coffee, the New York Fed said in a blog post published with the poll results.
The price hikes by service firms and retailers would follow a rise of about 4% last year.
The surveys were conducted at a time when “several tariff announcements were made and then paused” by the Trump administration, making it difficult for business executives to plan, New York Fed economists Jaison R. Abel, Richard Deitz and Ben Hyman wrote in the blog post.
“Many firms reported [in last month’s polls] that they were uncertain about tariffs and their impact on costs,” the economists said.
They added, “With higher cost and price increases expected in the year ahead, expectations for overall inflation in the economy have also picked up” to between 3.5% to 4%.
Nearly 9 in 10 manufacturers and about 8 in 10 retailers and service firms polled by the bank reported using imported goods.
Executives at manufacturers, retailers and service firms polled by the Federal Reserve Bank of New York said inflation is driving up their costs — and they intend to share some of the pain with their customers — which could mean higher prices for consumers.
In one of two surveys conducted last month by the New York Fed, manufacturers across the state indicated that they are planning to raise their selling prices by an average of 5.4% this year in response to increases in the cost of raw materials and employee wages that average 7.3% compared with last year.
The second survey found that service firms and retailers in the metropolitan area expect to raise their prices about 5% this year, on average, in response to cost increases of 5.7%, according to the results, which were released on Wednesday.
The New York Fed polled executives at about 100 factories and about 200 service firms and retailers, respectively, from Feb. 3 to Feb. 12. Long Islanders participated in both surveys, but the identities of the participants were not disclosed by the bank.
One local business leader told Newsday the results highlight challenges to continued economic growth in Nassau and Suffolk counties.
Matt Cohen, president and CEO of the Long Island Association business group, said companies are facing an “uncertain operating environment” while “also bracing for the impact of tariffs."
He added, "Although our private sector is nimble and innovative, this confluence of factors presents a daunting challenge to our regional economy."
The price hikes by manufacturers would follow increases of 3.2% in both 2023 and last year, when some manufacturers paid substantially more for aluminum, copper, electricity and shipping. Food producers had to spend more on chocolate and coffee, the New York Fed said in a blog post published with the poll results.
The price hikes by service firms and retailers would follow a rise of about 4% last year.
The surveys were conducted at a time when “several tariff announcements were made and then paused” by the Trump administration, making it difficult for business executives to plan, New York Fed economists Jaison R. Abel, Richard Deitz and Ben Hyman wrote in the blog post.
“Many firms reported [in last month’s polls] that they were uncertain about tariffs and their impact on costs,” the economists said.
They added, “With higher cost and price increases expected in the year ahead, expectations for overall inflation in the economy have also picked up” to between 3.5% to 4%.
Nearly 9 in 10 manufacturers and about 8 in 10 retailers and service firms polled by the bank reported using imported goods.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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