Eight in 10 firms have increased prices due to supply chain issues - report

A survey of over 1,000 businesses produced by the British Chambers of Commerce (BCC) has thrown sharp focus on the impact of skills and commodities shortages for UK firms, with spiralling prices in evidence.

The data shows an overwhelming majority of businesses are raising prices as they face acute shortages and cost pressures - with vehicle fuel, shipping containers and utilities cited as the top areas of concern.

When asked if they had seen a change in the price of their goods or services in the past year, 80 per cent of respondents in total reported increases, with 46 per cent reporting significant increases and 34 per cent reporting slight increases.

Fifteen per cent reported no change with only 2 per cent reporting any kind of decrease.

For manufacturers the above question drew an even starker answer, with 92 per cent seeing an increase in the price of their good and services.

When asked whether they, or any business in their supply chain, had experienced either increased costs or shortages of a variety of commodities over the past 12 months the results were striking.

Of all respondents, 52 per cent cited vehicle fuel, 34 per cent shipping containers and 30 per cent utilities such as gas or electricity

Of manufacturers, 50 per cent cited steel, 47 per cent shipping containers and 45 per cent vehicle fuel. Only 2 per cent of manufacturers reported that they had not faced increased costs or shortages from the items listed.

Shevaun Haviland, director general of the British Chambers of Commerce, said: “These figures present a deeply worrying picture of the difficulties that businesses are currently facing, across multiple fronts as supply chain disruption persists.

“Firms are facing huge pressures as they battle to keep on track for Christmas and provide the goods and services the UK needs, but we have yet to see any concrete steps to address these issues.

“Unless action is taken soon, firms could be forced to cut back on their capacity or limit the range of products they offer.

“The huge number of unfilled vacancies is placing further strain on staff having to cover, and Covid is also still with us. With more than 30,000 people a day having to isolate, it presents another on-going disruption to the workforce which businesses must grapple with.

“While there are some global issues at play, there are levers that the Government can pull to improve current business conditions, for example, the introduction of an energy price cap for SMEs and providing more temporary visas in the hardest hit sectors through expansion of the Shortage Occupation List.

“The new Supply Chain Advisory Group must look carefully at these and other solutions to the immediate and longer-term challenges.

“Firms also want to see a moratorium on all policy measures that increase upfront business costs for the remainder of this Parliament. ”