Inflation and Out of Home

A November 2021 New York Times headline says it all: The Bond Market Says Inflation Will Last.  You Should Be Listening.  The article appeared shortly after the bond market’s 5 year inflation expectation rose to 3%.

The consumer price index (“CPI”) rose to a 30 year high in October 2021.  Here’s the annualized change in the CPI since January.

Billboard Insider thinks inflation is due to a huge increase in the money supply resulting from the last round of government stimulus which occurred just as the economy was shrugging off covid.   What does it mean for your out of home company?

  • Expect to pay more on your CPI-linked out of home leases.
  • Expect to pay more for vinyl, steel, digital billboards and other out of home components.  Yesterday Billboard Insider’s affiliate Circle City Outdoor received a price increase notice from one of its vendors.
  • Ask for an increase when ad contracts renew.  If you roll over ad contracts at the same rate you will be going backwards due to inflation.
  • Try to lock in a fixed rent on your long term leases.

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