80 percent of firms in a new British Chambers of Commerce survey have experienced an increase to their prices over the past 12-months with nearly half (46 percent) categorising these as ‘significant’.
The scale of the pressures in the economy have been put into sharp relief by new data issued by the British Chambers of Commerce. Based on the responses from 1,000 businesses the BCC data confirms that 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 most pressing areas of concern.
When asked if they had seen a change in the price of their goods or services in the past year, 80 percent of respondents in total reported increases, with 46 percent reporting significant increases and 34 percent reporting slight increases. 15 percent reported no change with only 2 percent reporting any kind of decrease. For manufacturers 92 percent had seen an increase in the price of their good and services. 50 percent of businesses surveyed reported that either they, or their supply chains, had experienced skills shortages in the past 12 months.
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. 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.”
In reference to the ONS Labour Market statistics for November, the BCC said that the chronic staff shortages encountered by businesses are intensifying and could derail the economy. BCC Head of Economics, Suren Thiru, said: “Although earnings growth remains elevated, achieving wage increases over a sustained period is likely to prove challenging without a marked improvement in productivity and an easing of the cost pressures faced by firms. More significant support is needed to help firms access the skills they need when they can’t recruit locally, including supporting the hardest hit sectors through expansion of the Shortage Occupation List.”