It seems that renaissance of European companies’ earnings comes to an end after it just began, Bloomberg writes. Growing costs challenge corporation around the globe: raw materials costs and wages are rising. Inflation is not a bad thing, but the questions is whether the companies will be able to increase prices for consumers.

The problem worsens because costs increase is observed along with slower economic growth of the region. In means that many companies are not able to raise selling prices easily, as buyers can find substitutes online. Data on earnings in third quarter was worse than sales data.

Unlike American companies, European shares started showing higher profit growth last year, while pessimistic mood returned to the market this year already.

Now analytics expect that earnings growth for corporations included into Stoxx Europe 600 will rise to 9% next year from 6% in 2018.

Experts in Morgan Stanley assume that inflation exceeding economic growth tells about peak in margins. Analytics of UBS Group AG think that earnings of European companies can grow in 2019 along with prices.

Among companies that can raise prices are those, whose products cannot be easily copied or have real valuable brands, such as LVHM, some pharmaceutical companies, Heineken NV.