New research by Sense Partners into increasing costs shows that while the price of goods and services have increased across the board, inflated profits are not the driving force in New Zealand.
The report Greedflation in New Zealand? An imported narrative, was commissioned by BusinessNZ.
Director of Advocacy Catherine Beard says, in a statement, that the data behind it paints a clear picture of contributing factors.
“Greedflation is a term which refers to increased profit margins driving up price inflation. We’ve observed overseas a growing conversation around whether firms are using the cover of Covid and inflation to create super-profits for themselves,” she says.
“This report uses data from StatsNZ to show that increased profits are not driving inflation and that profits are actually leaner than they were pre-Covid.
“As this report details, in New Zealand the bulk of price increases for the non-financial sector of the economy are made up of the cost of inputs – 75 percent.”
Beard says the remainder was made up of equal parts wages and profit.
“It’s clear that input prices are a much larger driver of output prices than profits are.
“Our members tell us the cost of doing business has increased – in fact some sectors are making less and even entering negative-profit territory.”
The full report by Sense Partners can be found on the BusinessNZ website