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Electrolux Forecasts Inflation to be Short-Lived

One of the world’s biggest home appliances manufacturer expects things to get back to normal.

Inflation should settle down later this year as Covid-19 brings about a normalization for demand for consumer goods, according to the head of the world’s second-largest home appliances manufacturer.

A lot of money has shifted from services to goods during the pandemic. That put pressure on the production of goods. But there is no inflationary pressure in services. When the normalization happens there is case that inflation will normalize.

Electrolux is second to Whirlpool in manufacturing of washing machines, dishwashers, vacuum cleaners and kitchen equipment. This past year the company has had to deal with surging costs in everything from steel to ocean freight.

As more people have worked at home during the pandemic, consumer appliance makers’ business have boomed but most companies are expecting  the situation to slowdown as the pandemic eases and vaccinations rise.

Electrolux reported it expected the normalization in the second half of 2021 and they will continue to pass on all price increases in raw material and other costs to customers.

Electrolux and other appliance manufacturers have struggled to meet demand in the past year because of shortages of semiconductors, problems with ocean freight and the availability of steel and plastic.

As lockdowns lifted, customers have been rushing to buy appliances.  Companies  are fighting and keep up with demand and struggling to keep overtime going to meet customer needs,

As with many industries two other problems are the high cost of semiconductors and ocean freight.

The Swedish group has been experimenting with renting or subscribing to appliances but their greatest opportunity in increasing the “repairability” of its appliances. Trying to help customers work out whether it was worth repairing or replacing an item.

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