Authored by Wolf Richter via Wolf Street,
Manufacturers reported that the costs of health insurance for employees shot up by 14.2% on average; service firms reported an average increase of 12.9%, according to a report by the New York Fed based on a survey of companies in the New York-Northern New Jersey region.
These are averages, but “some firms reported increases of between 25% and 50% when they renewed their coverage,” the report said.
Manufacturers and service firms both reported that the costs of utilities jumpedbyabout 8.5% on average.About one-fifth of the companies reported increases of 20% or more. “Indeed,sharply rising utilities costs in some areas have been tied to the explosive growth of AI-related data centers,” the report said.
For service firms, the third worst cost increases were in business insurance, which jumped by 6.8%.This includes liability, property, auto, and workers’ compensation insurance.
For manufacturers, business insurance increases were the fourth-worst, with an average increase of 7.4%.
Nearly one in ten of these companies reported massive spikes of 20% or more in business insurance costs.
For manufacturers, the third-worst increases were goods and material inputs, which jumped by 8.0%. They reported substantial increases in the costs of tariffed inputs, such as aluminum, steel, equipment, electrical supplies, auto parts, coffee, and cocoa, etc.
For service firms, cost increases of goods and material inputs averaged 5.5%.
“A greater exposure to tariffs may be part of the reason manufacturing firms faced a sharper increase in goods and materials costs” than service firms, the report said.
Source: ZeroHedge News
