CEA members battle record-high energy and commodity prices
By Joanna Oliver30 November 2021
The perfect storm of the ongoing pandemic, unprecedented demand for steel, shortage of raw materials, lack of shipping containers and space onboard ships, combined with rampant freight cost inflation, scarcity of HGV drivers, soaring energy costs and the continued post Brexit trade fallout of new tariffs and increased customs procedures, are hitting UK manufactures hard where it hurts – the bottom line.
A recent CEA ‘snap shot’ member survey confirmed input costs were still rising and supply chain delays are biting into the production schedule.
The survey found that:
95% suffered a severe or slight impact from rising energy costs.
83% predicted that price rises would continue to further impact their business.
Only 56% of respondees had taken steps to hedge against energy price rises before the ongoing crisis hit.
94% said they would have to pass on energy and raw material price increases to customers.
Only 6% said they were able to absorb the increased production costs.
56% said that rising steel prices were having a severe impact on their business.
The figures are quite compelling and clear that manufacturing needs help and quickly.
Prices for gas are up 250% since January, and have increased 70% since August and the government has offered no solution, although Her Majesty’s Government has said that it is “exploring ways to manage high energy costs”.
The CEA will be working with its members in lobbying government to step in as a matter of urgency to provide swift and decisive action to support manufacturing sectors.