Companies plan to raise product prices and new employee capital, and inflationary pressures are intensifying.

Due to continuing capacity constraints, the number of outstanding orders surged to the highest level since 1973

Inflationary pressures are intensifying as companies plan to raise product prices and new employee capital, according to a report by the Philadelphia Federal Reserve.

The Philadelphia Fed's latest manufacturing survey shows that rising input costs for producers pushed the price index to its highest level in 40 years in May.

The data also showed that the price index paid this month soared to its highest level since March 1980. Nearly 77% of companies reported an increase in input costs and zero reported a decline in costs.

In addition, the company's survey shows that companies expect salaries to rise by 4% next year, up from the median forecast of 3% in February, reflecting that inflation is not just a temporary upward pressure on prices caused by supply chain challenges, as the Fed says.

As a result of continuing capacity constraints, the number of outstanding orders surged to the highest level since 1973, highlighting the impact of bottlenecks and shortages on the manufacturing recovery.