“These energy prices are going to be baked into core inflation,” said Shon Hiatt, an associate professor at USC’s Marshall School of Business, “meaning all of the services we pay for, any of the products that we buy — those prices are going to increase.”Paullin’s business illustrates those ripple effects. He owns PSM Industries, a small manufacturer in the Harbor Gateway with around 120 employees locally . They make small-ish metal parts, mostly for cars.
Now, Paullin says his company is fighting to keep ahead of the rising prices. They’re raising prices and looking for ways to save money. His expectations that PSM will turn a profit this year are “eroding quickly … It’s starting to look like a break-even year.” “It’s like a wildfire,” Paullin said. “The fire started with gas, and now it’s blown across every part of our cost structure.”Paullin says other raw materials — usually around 30% of his company’s total expenses — are more expensive these days as well. In addition to fuel surcharges, packing materials have also made shipping parts more expensive; PSM ships around 35-40% of its products overseas.
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