Businesses' cost expectations are "off the charts", according to preliminary May results from the ANZ Business Outlook survey.
And if your costs are going up, what do you do? Why raise prices. And yes, the pricing expectations of Kiwi businesses have hit a record level again in a survey dating back to 1992.
A gobsmacking net 80% of firms surveyed expect higher prices ahead. So, a net 58% of firms expect to raise prices.
These inflationary pressures somewhat overshadow the 'good news' in the latest survey results, with business confidence surging again.
But commenting on the pricing pressures, ANZ chief economist Sharon Zollner said the strains in the economy are starting to show, as the economy tries to grow faster than it physically can, given shortages of both goods and labour.
"The degree of reported disruption caused by inward freight issues jumped for both construction and services, while for outward freight, reported disruption jumped economy-wide.
"Temporary it may be; immaterial it is not," she said.
"Any ECON 101 student or business person can tell you that strong demand and hampered supply is a sure-fire recipe for inflation.
"The [Reserve Bank] can ignore it only as long as inflation expectations remain well-anchored. So far so good; but it’s a lagging, not leading, indicator," she said.
In terms of some of the detail, business confidence jumped 9 points to +7%, while the own activity outlook rose 10 points to +32.3%. Export, investment and employment intentions, capacity utilisation, and profit expectations all rose between 4 and 10 points.
Expected costs rose another 4 points to a net 80% of firms expecting higher costs ahead. A net 58% of respondents intend to raise their prices, a 2 point lift to a fresh record high, in data that goes back to 1992. Inflation expectations rose 0.2%pts to 2.2%, a little above the RBNZ's explicit 2% inflation target.
Despite high costs, profit expectations jumped 10 points, with a net 9.6% of firms expecting higher profitability ahead, the highest since October 2017.