There's been significant global supply side disruptions as well leading to inflationary pressure.
Yeah, I did include supply chain issues in that post as a driver. Yes they are most definitely there, having experienced them in business for the last 18 - 24 months I understand that all too well.
However, I do think the driver behind that isn't as clear cut, because there's plenty of evidence to suggest that what's driving the supply chain issues for the most part is an inability to cater for substantially increased demand. By which I mean that if demand had continued to grow at pre-pandemic levels, the disruptions would have been far less, and more narrowly focussed on certain goods where disruption has caused some real genuine issues.
I think the greatest evidence of this is to look at the retail sales numbers, year on year growth has been well above trend during the pandemic for most quarters, and whilst inflation will account for some of that growth, there's also been a huge drag on that in services, particularly hospitality.
So whilst lot's of stuff is harder to get, and lead times for supply aren't getting any better, common sense will tell you that you can't get the kind of growth we've been seeing without selling more goods, and it can only stand to reason that in order to sell more goods, you must have more goods to sell.
And it's unquestionable when you look at the numbers, that indeed we have been selling more goods, and that has to mean we have been getting more goods to sell.
The only other explanation is that actual inflation is way higher than the number being calculated. Though for that to be the case, it'd need to be sitting at around 10%, give or take.
Monthly and quarterly estimates of turnover and volumes for retail businesses, including store and online sales.
www.abs.gov.au