“Firms were reluctant to put up their prices, and because they didn’t want to put up their prices, they didn’t want to put up wages,” Dr Lowe said. “It’s quite possible a period of protracted headline inflation will see this psychology shift and firms will decide they have to put up their prices, and if their prices are rising, they can afford to pay higher wages.”
“Particularly because we’ve got fuel prices going up, and then we’ve had wheat prices jumping about 35 per cent following the crisis between Russia and Ukraine.”Still, analysts remain largely optimistic about the earnings outlook for infrastructure companies such as toll roads, despite the surge in fuel prices. The shares of
Macquarie reduced Transurban’s forecast earnings per share estimates between 2022 and 2024 by about 1 per cent, but increased its 12-month target share price slightly to $14.96 and kept an “outperform” rating. Simon National Carriers, a freight group that delivers products around the country including timber and equipment, has a fuel surcharge of 33 per cent for heavy goods weighing more than 10,000 kilograms.Toll Global Express’ fuel surcharge has been 22 per cent since the start of January for priority parcels.
“Anecdotally, there is a lot of pent-up demand for both leisure and corporate travel [and] our view is, in the short term, you will see a spike in travel.Other factors included how wages grew compared to inflation, Mr Drew added.