What accounts for the increase in profit margins in a situation where production costs are rising sharply?

Companies in OECD countries are now facing a sharp rise in their production costs: faster wage increases, higher prices for energy and other raw materials, transport, semiconductors, etc. When companies’ production costs rise sharply, profit margins usually fall. This time, however, the opposite is true: a sharp increase in profit margins even though production costs are rising. This can be explained by: The persistent under-indexation of wages to prices, which has led to a decline in real wages; Pricing power, which has once again become strong for companies, enabling them to raise their prices more than their costs. Companies are therefore benefit ing from strong market positions, both in the labour market and in goods and services markets.