SparkleTeam SparkleTeam
(561) 988-5410

Why are prices are so high right now in the cleaning industry?

high prices cleaningWhether at the gas pump or the supermarket, have you been suffering from sticker shock recently? From computer microchips to cereal, prices are rising across the board for both commercial and retail consumers, affecting a multitude of products. A recent report from the Labor Department says consumer prices rose 5% for the 12-month period ending in May. This marks the sharpest increase recorded since August 2008 during the Great Recession.

The trend has left few industries untouched. The cleaning industry is no exception, as costs are increasing market-wide for basic cleaning supplies and consumables. We break down the reasons behind the price spikes, and what to expect in the near future.

What is causing the market-wide spikes?

Currently, there are shortages in key raw ingredients essential to the production of many products. This creates major bottlenecks in the global supply chain. One example is petroleum resin, which is used to make plastics. The shortfall is partly thanks to the sudden freezing temperatures that occurred this past February in Texas, which shut down the world’s largest petrochemical complex.

These shortages are happening just as public life is finally opening up in the United States and around the world following the COVID-19 pandemic, increasing global consumer demand. Transportation has also become a factor, as the essential network of cargo ships, trains and trucks are struggling to keep up with this increased demand. This was only aggravated when a stuck cargo vessel blocked traffic through the Suez Canal in March. It’s one of the busiest canals in the globe, which channels around 12% of world trade. In addition, an estimated 5.5% of all ocean freight capacity is currently waiting outside a port. Storage space for finished goods is also scarce, and the delays are not expected to end anytime soon.

All this follows the cycle of lockdowns during the COVID-19, shutting down factories and warehouses all over — creating a perfect storm for price inflation.

How will this affect your cleaning costs? 

  1. Cleaning Products: The current shortage in solvents and resins (used to make polymers) is affecting the production of cleaning products, as these are key ingredients in many formulations and cleaning items. Spartan Chemical Company has already confirmed a brand-wide 4.9% price increase on all products. Meanwhile, Clorox has announced that the company is currently considering price increases due to these additional costs.
  2. Consumables: The lack of resin affects the cost of many plastic consumables like trash liners, which has led to increases between 10 and 22%. Due to the current global shortage in wood pulp, paper products like tissue and paper towels are also experiencing price increases. Major paper suppliers Kimberly Clark and Essity have already increased their prices on paper-based products.
  3. Labor: Labor will also become a factor in increased cleaning costs, as Florida is currently experiencing a shortage of workers. Though the market will eventually adjust, labor will cost more due to the voter-approved minimum wage increases. Starting in September this year, minimum wage will go from $8.65 to $10 an hour, followed by a $1 dollar increase every year until 2026, when it reaches $15 an hour.

Comments

Comments are closed.