The Q3 earnings season has delivered a similar-sounding drumbeat from a wide range of companies. Energy inflation has unsurprisingly been a regular topic: Trucking company Werner Enterprises said “rapidly rising fuel prices” were among the reasons it needed to warn about its results ahead of time and United Air Lines Holdings CEO Scott Kirby said higher fuel prices would cost his team an extra $8 billion this year and predicted that more than half of U.S. airlines will lose money in 2026 because of expensive jet fuel.

Beyond that, executive teams have been pointing out other drivers of rising costs. Some examples:

• UnitedHealth Group’s management team said the costs of the care they’re paying for “remain stubbornly high” even if they might be stabilizing as we head toward 2027. A prominent problem, the United team contends, is that certain doctors are abusing the arbitration process of a law meant to stop patients from being walloped by surprise medical costs.
• General Motors executives said recently that pricier commodities, semiconductors and shipping services will cost the automaker $2 billion more than initially expected this year. CFO Paul Jacobson said the pain could last well into 2027: “If we were to simply annualize the recent incremental commodity inflation since July, it would translate into an additional $1 billion to $1.5 billion of EBIT-adjusted headwind for 2027.”
• Not as willing to ballpark the potential tab of raw material inflation were the leaders of Illinois Tool Works. CFO Michael Larsen told analysts that, “like everyone else, we continue to see a lot of inflation in raw material costs, such as resin, chemicals, steel, electronic components kind of in that 4% to 5% range.” But he was less forward about what that might mean for ITW’s margins beyond saying that the company was able to push a little more price in the third quarter than the cost increases it needed to digest: “Just given the very kind of dynamic conditions here, we’re going to refrain from providing more detail on Q3 and Q4.”
• Fuel, freight and healthcare are mentioned most times during today’s inflation conversations. Word of a sneakier input to watch in coming months came from Genuine Parts, the parent of NAPA and the Motion industrial distribution business. Chief Financial and Operating Officer Bert Nappier mentioned freight pressures but also pointed to real estate getting pricier: “The rent expense pressure is really coming out of […] renewals happening in a post-COVID period. We’re seeing those being elevated versus when they were negotiated five years ago, six years ago.”

How strong demand is helping companies offset inflation pressures

There is a silver lining to these persistent price pressures. Today’s inflation is being accompanied, and in some cases being produced, by an industrial economy that’s gathering momentum and spending money on new factories, upgraded equipment and mountains of raw materials. And consumer spending is holding up enough to have United Airlines’ Kirby be confident in demand and his team’s ability to be “much more rational” about pricing the carrier’s tickets.

The ability to pass along to customers higher input prices — at least for now — has been a near-universal talking point on Q3 earnings calls so far. That wouldn’t be possible without demand that is strong and even strengthening in some cases.

Larsen and ITW President and CEO Chris O’Herlihy told analysts that orders have been growing nicely across the company’s many business lines. O’Herlihy said growth has been very strong “not just on the industrial side in areas like energy, aerospace, construction fabrication and so on, but also on the commercial side on small fab. Similarly, with Test & Measurement, obviously, [semiconductor demand] has been strong for a little while now but we’re now starting to see a real nice pickup on the industrial side of the business as well.”

Honeywell Technologies is another company that plays in a lot of end markets that reflect where much of the global economy is headed. Chairman and CEO Vimal Kapur last week told investors their outlook for 2027 is “robust” and built on continued investment in energy infrastructure as well as building and industrial automation. Fourth-quarter orders, they added, should be up nearly 10% from late last year.

Strong demand is giving Kapur and his team the ability to raise prices and offset the 4.5% inflation they think Honeywell will need to absorb over the second half of this year. But, Kapur told analysts on Oct. 22, there’s more to succeeding in this environment than just asking clients for more money.

“The pricing attainment doesn’t require only the action of pricing, but it requires good customer service, good customer communication, a good pipeline of new product,” he said. “I think that comprehensive, 360-degree view is what we have really adopted to attain the price and keep the price-cost positive.”

It’s a worthy reminder to cover all the bases — as it seems inflation is doing these days.