Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
The ONS has released the Business Insights survey showing the impact of rising prices and logistics issues for firms.
‘’The anecdotes from truckers, turkey farmers, builders and bosses about escalating problems in the supply chain are far from isolated cases. Rising costs hitting industries across the board are backed up in the latest large scale survey from the ONS. The Business Insights research shows that almost a third of businesses (29%) questioned reported that the price of materials, goods and services purchased over the last fortnight had increased by more than normal price fluctuations.
The situation is particularly acute in the construction industry, given that more than half of firms surveyed said prices had increased higher than usual levels over the last two weeks. Costs of materials like bricks, timber and steel were already rising before this week’s latest spike in gas prices, with companies like British Steel hiking costs per tonne by £30 last week because of escalating energy and haulage costs.
There are increasingly concerns that the UK is being caught in an inflationary spiral, with little end in sight for soaring prices. President Putin may have promised to plug some shortfalls in the supply of gas, but the lack of LNG storage facilities, amid high demand from Asia and warnings of a cold winter to come, are likely to see further price spikes.
The army may have put boots on the grounds of forecourts to ease the current fuel crisis, but industries elsewhere are still feeling the pain from the shortage of HGV drivers. Importing has turned from a headache into a migraine, with the number of companies reporting to the ONS that the lack of hauliers or logistics equipment was a challenge, doubling in September (22%) compared to April (11%).
Although short-term visas are now being offered to try and lure overseas workers to fill seats in lorry cabs and staff poultry processing plants, it seems that the government still has its ear plugs firmly in when it comes to the increasingly desperate pleas from other sectors.’