b'ECONOMIC FOCUSIMPACT OF By Warren Heeley Is high inflation affecting the INFLATION international relocation of employees?H igh inflation: a negative economicAdd to this the Russian invasion ofThese increasing costs are squeezing factor that Canadians and most ofUkraine and an enormous spike in oilcompanies that are trying to provide the world have not experiencedprices and we have the perfect stormthe most cost-effective services for their in decades. Typically measuredfor rapidly rising inflation and consumerrelocation clients.by the Consumer Price Indexprices. The Pew Research Center analysis (CPI), the inflation rate reached 6.7 per centgoes on to say, Data from 46 nationsTHE IMPACT ON EMPLOYEE in Canada and 8.4 per cent in the U.S. infinds that the third-quarter 2021 infla- RELOCATIONMarch 2022. These are the highest ratestion rate was higher in most of them (39)So how is rising worldwide inflation experienced by these countries since 1991than in the pre-pandemic third quarterimpacting relocation? There are a and 1980 respectively. North America is notof 2019. number of areas of concern, principally alone in this inflationary pressure. Otherassignee packages, salaries, benefits developed countries are experiencing infla- The common cycle experienced by these tion rates that range between 4.1 per centcountries has been pre-pandemic lowand other allowances, as well as real (South Korea) and 7.6 per cent (Germany). inflation, dropping or stagnant inflationestate, rental rates and continually rising through 2020 and into 2021 caused byfreight rates. Inflation has historically occurred duringgovernment shutdowns, followed by normal business cycles and countries havesteeply rising inflation starting in Q2 ofTo get a perspective on the inflationary typically dealt with rising inflation by2021 as the world struggled to get backimpact, the most recent inflation rates increasing interest rates to stem the infla- to something approaching normal. Thisfor the destinations where employees tionary tide. A Pew Research analysis fromhigh inflation is the polar opposite of theare most often relocated (i.e., the U.S., November of 2021 stated, The recent accel- lengthy periods of low inflation experi- Australia, Germany and the U.K.) are eration in the rate of inflation appears to beenced prior to the pandemic. currently between 5.8 and 8.4 per cent. fundamentally different from [accelerations] tied to the regular business cycle. Explana- Rising inflation is not only impacting tions for the current [inflation] phenomenoncosts for relocation services. It is also include continuing disruptions in globalimpacting relocation and moving supply chains; turmoil in labor markets; andcompanies, states Michael Deane, owner strong consumer demands after local econ- and vice president of client services omies were reopened. at All Points Relocation Service Inc. 22PERSPECTIVES Summer 2022'