By Elsie Kamsiyochi
The escalating conflict between the United States, Israel, and Iran is beginning to leave a deeper mark on the global economy, as companies across multiple industries warn that rising costs, disrupted supply chains, and weaker consumer confidence are threatening their financial outlooks for the year ahead.
From manufacturers of household paint to major aircraft producers, businesses are increasingly acknowledging that the war has introduced a new layer of uncertainty into markets that were already under strain from tariffs, inflation, and sluggish demand. Corporate leaders reporting quarterly earnings this week said the longer the conflict continues, the more pressure they expect on operations and profitability.
One of the biggest concerns remains the instability around the Strait of Hormuz, a critical shipping route that handles a significant portion of the world’s oil and liquefied natural gas exports. Continued attacks on commercial vessels in the region have pushed transportation and insurance costs sharply higher, while forcing companies to rethink delivery schedules and sourcing plans.
Dutch paints and coatings company AkzoNobel, the maker of the Dulux brand, said the conflict is already driving up the cost of raw materials used in production. Chief Executive Greg Poux-Guillaume noted that the company expects its raw materials basket to rise by high-teen percentages over the next two quarters due to shipping disruptions in the Gulf. Although AkzoNobel has been able to offset some of that pressure through pricing increases and internal cost-saving measures, executives said the full impact has yet to be felt.
Analysts say firms with strong pricing power may be able to pass those additional expenses on to customers, but companies in more competitive sectors could face shrinking margins. Investors are now watching closely to see whether businesses can continue absorbing the shocks or if more widespread price increases will eventually feed into global inflation.
Consumer goods companies are also feeling the strain. French food giant Danone reported that shipments of baby formula have been disrupted by the conflict, complicating distribution networks already under pressure. Other manufacturers, including those that rely heavily on petroleum-based inputs such as plastics and packaging materials, are warning that sustained high energy prices could force them to raise prices later this year.
Industrial groups are reporting similar challenges. TE Connectivity said prolonged instability would likely push up freight expenses and the cost of oil-derived materials such as resin, making price increases for customers increasingly unavoidable. Elevator maker Otis Worldwide also cited war-related shipping delays that have slowed equipment deliveries in key markets.
The travel sector has emerged as one of the hardest-hit industries. Higher jet fuel prices and geopolitical uncertainty are hurting both airlines and tourism companies, as nervous travelers postpone trips and operating expenses rise.
German travel company TUI cut its full-year profit forecast and suspended revenue guidance, citing reduced visibility and more cautious consumer spending. In the United States, United Airlines also projected lower-than-expected profits, pointing to weaker travel demand and rising fuel costs.
Even companies that entered the year with strong order books are becoming more cautious. GE Aerospace said it likely would have raised its annual forecast if not for the uncertainty created by the war. Executives said the broader business environment has become too unpredictable to justify a more optimistic outlook despite solid underlying demand.
Mining and resource firms are also being drawn into the fallout. Higher shipping costs, expensive fuel, and delayed deliveries of key industrial supplies are squeezing margins across the commodities sector. Several companies have begun contingency planning in case the conflict worsens or trade routes become further restricted.
According to a review of recent corporate statements, dozens of global firms have either lowered their earnings guidance, warned of direct financial impacts, or signaled upcoming price increases since the conflict intensified.
Economists warn that if the disruption persists, the effects could spread beyond corporate earnings and begin weighing more heavily on consumers worldwide.
For now, much depends on how long the conflict lasts and whether safe passage through the Strait of Hormuz can be restored. Until then, companies across industries are preparing for a period of elevated costs and prolonged uncertainty that could reshape the global business landscape in the months ahead.
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