UK SME manufacturers are struggling with inflation and price rises
Supply chain price changes are negatively impacting the vast majority of UK SME manufacturers , accordingly to the latest Manufacturing Barometer survey . In addition , half of all respondents said their profits had reduced in the last six months .
This quarter ’ s findings reveal that 92 % of firms are struggling with inflation . Also highlighted as having a negative impact on business were lead time changes ( 85 %), energy costs ( 83 %), availability of suitably skilled staff ( 77 %), and the ability to pass on rising costs to the customer ( 75 %).
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Nick Golding , Managing Director at SWMAS , comments , “ Profitability remains a challenge for most firms and is at a similar level to the previous quarter . This indicates trading conditions remain challenging for the manufacturing sector and despite companies keeping a positive outlook , this is not translating into the sales and profits in all cases .”
27 % of firms said they had increased their staff headcount in the last six months and 30 % had increased their investment in capital equipment . This is broadly in line with last quarter ’ s results and is at a historically low level for this Manufacturing Barometer .
In April 2022 , 67 % predicted that cost changes could be passed to customers , but confidence levels have drastically reduced with only 13 % now agreeing this is possible , and 75 % saying they are unable to pass price changes on .