Why is that exactly? Imports from China were “threatened” to go up 15% from China under Trump. You’re saying it’s 300%
There were many that predicted mattress industry in 2018 would grow from 17 billion in 2018 to 44 billion in 2024. Maybe that prediction is trying to come true through simply inflating prices. I’ve checked places I’ve always bought foam before, prices are the same as 2 years ago.
Yes, foam and all mattress components have gone up tremendously in the past year. This was caused by the measures implemented during CV-19 lockdowns that closed most manufacturers and plants and caused broken supply chains across all industries. When businesses were allowed to reopen, most of our suppliers were out of stock because they had been closed for months. You can add to this mass money printing by most governments and then you have the perfect storm where too much money is chasing too few goods.
According to Michael Burry, the hedge fund manager (the big short), who made a fortune shorting the housing / stock market back in 2008, he is predicting that the world will go into hyperinflation and that we will pay even more for everything. We can already see this trend happening in building materials especially wood, commodities and food at the supermarket. My advice, if you need a mattress in the next year it’s a good idea to maybe get it as soon as possible. In our industry we have seen five price increases in the last 6 months alone and our suppliers are hinting that more will come.
I think this will depend on your time horizon. Supply shocks will cause the cost of goods to rise in the near term but long term you would expect things to level out. The two caveats to that are 1) changes in consumer habits and 2) permanent loss due to folding businesses but as I understand it, neither will have a negative affect on the latex industry. As for hyperinflation, it hasn’t been seen int he developed world for decades, so I would eagerly bet against michael burry.
most of the things you listed are the result of temporary loss of capacity related to covid. Over the long term, as that capacity comes back online, prices will normalize. Some just completely screwed up their demand forecasting like the lumber industry. They expected the commercial market to crater and at the same time did not account for DIY demand at all, resulting in a lack of supply. Housing and steel are exceptions but they are also driven by structural factors outside of covid.
Core CPI, which strips out volatile food and energy, is 1.3% for the last 12mths. When it goes north of 3-3.5% for a sustained period, then there might be something to discuss. Also, when Larry Summers gets upset that probably means you are doing something right.
Two years ago a carton of eggs was $2.27. Today, same store, $3.89. 58% increase, my steaks have doubled in the last year, I doubt this is temporary. In our case, polyurethane foam is up 50% in the last 9 months alone and in our 20 years experience in the foam industry, we have never seen a price drop in foam. Unlimited money printing by governments will have an effect on inflation. In March 2019, The Wall Street Journal stated that the “main cause of hyperinflation is the central bank printing money to fund gaping public spending deficits”.
When I reference normalization I am thinking latter half of 2022 into 2023. Of course the supply chain might try to keep prices high to pad their bottom line. Currently see this with meat/ poultry in my area where wholesale prices have reversed course but that is not completely shown up in retail prices yet.
I wouldn’t worry about the WSJ. They have been whining about that since the 80s and yet no inflation anywhere to be seen. Economist worldwide admit classic models fail to explain the relationship between spending and inflation. The US may be poised to raise taxes anyways, which will counter the stimulus to some degree.
35% of all US dollars in existence have been printed in 10 months. How this experiment will end, nobody knows. The price of foam has gone up 50% in the last year we have never seen a decrease in price. Get ready to pay more for your mattresses.
6 months have passed since the last update so here are the new developments.
Inflation is not transitory and keeps making our job as mattress makers a chalenge. Most increases are related to ocean freight and we have no solution for these inceases.
Our containers now cost up to $17,000 from Asia (that’s if you can get one), as before the pandemic it was about $2000. Ocean freight conditions keep getting worse by the day and there’s no end in sight.
The cost of raw fabric is up 35% in the last 2 months.
We can’t get any pillows for a while due to the fabric issue overseas.
4lb and 5lb memory foam has seen a 35% and 60% price increase in the last 6 months.
Raw materials used to make 4lb and 5lb memory foam are now in short supply and it can take up to 1 month to get our regular orders.
Latex will be going up in the next month and from what we heard from our suppliers it will be quite significant.
The bottom line is that everyone is facing the same thing or worse. Thankfully, the experts say there’s nothing to worry about!
why would you expect a change when the pandemic and its effects are ongoing, and in 6 mths no less? Still a different problem from stimulus induced hyperinflation you began the thread with.
Here’s our latest update on price increases. Since November 2021 we had 2 price increases from our latex, cotton and wool manufacturers. The latest one on October 1, 2022 was approximately 5%.
Goods are only worth what people are willing or capable of paying for them. Part of the reason we have inflation, is because money flooded the economy driving up prices. This increase in consumption along with covid government policies lead to supply shortages. The good news is that supply disruptions are almost over. However prices have yet to drop in the latex market and inflation in the USA stands at 8.3%.
Now they will try to fix soaring inflation by raison rates, but many economist warn that this could lead to a recession, time will tell…
“Excessive fiscal stimulus provided during the pandemic, particularly the last $1.9T package at the end of March 2021 just as the economy was already emerging from the lockdowns . . . was what turbocharged consumption and drove inflation to 40-year highs.” — Morgan Stanley