Manufacturers are continuing to raise both UK and export prices at record levels in response to escalating inflationary pressures which show little sign of abating.
The latest Make UK/BDO Manufacturing Outlook Survey found that domestic prices grew at record rates in the last four quarters and margins collapsed as businesses increasingly struggled to pass on costs to the consumer.
The gap between output volumes and the balance of new order growth widened substantially as manufacturers overestimated their own performance and underestimated global demand. These results indicate supply-chain challenges are getting worse rather than better.
Fortunately, manufacturers are hiring again and are planning to invest more in the coming 12 months which will hopefully reduce the pressures the sector currently faces.
The most immediate priority for the Chancellor in the short-term must be to use his Statement do whatever it takes to support companies through this difficult period. The alternative is to leave many businesses facing a tipping point from which some won't recover
Stephen Phipson CBE
Chief Executive, Make UK
Manufacturers on the whole are currently managing to meet demand, but this will be difficult to sustain. Costs are rising at a speed that they cannot respond quick enough to and, combined with supply chain disruptors, which will sadly now be exacerbated by the invasion of Ukraine, manufacturers will be turning to the Chancellor for immediate action.
