96% of British manufacturers have faced difficulties due to rising supply chain prices, finds survey

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19th August 2021 09:26 - Industrial

96% of British manufacturers have faced difficulties due to rising supply chain prices: A survey of small manufacturers in the UK has revealed that almost all of those polled (96%) have experienced difficulties with the rising costs of within their supply chain, with more than half of those polled describing the situation as a 'major' problem.

The survey, by business support groups South West Manufacturing Advisory Service (SWMAS) and Manufacturing Growth Programme, polled 260 small and medium-sized British manufacturers in July 2021. It revealed that 94% of participants believe that it is the lack of raw materials available is leading to the uptick in prices, while 82% point to transportation costs, and 63% a lack of capacity to meet demand. Almost half those polled said that recruitment challenges are a barrier to growth (49%)

The Manufacturing Barometer is a quarterly survey that charts the experiences of UK SME (Small/Medium Enterprise) manufacturers. It is the largest survey of its kind, informing both government industrial strategy and the national debate on manufacturing.

The latest survey found that that the problems with supply chain due to Brexit and the global coronavirus pandemic was having an impact on profit margins for small manufacturers, with those expecting profits to increase in the next six months falling from more than half at the start of the year (52%), to 46% in the latest survey.

The survey also found that while 79% of manufacturers polled have used the Government's furlough scheme over the last 12 months, just over a quarter were still using it today, while 53% said that previously furloughed staff have returned to work. Just over one in five (21%) said they have not furloughed any staff during the pandemic. Of the 26% who are still using the scheme, 71% said the have less than a quarter of their workforce still furloughed, while 22% have up to half, and 4% have up to three-quarters. Just 3% said they have more than three-quarters of their employees currently furloughed.

Inflation has also risen in many countries around the world with factors such as shipping issues, shortages of goods and limited supplies of semiconductors having an impact.

Nick Golding, managing director of SWMAS, said: "It appears we are seeing the first signs of supply chain struggles starting to hinder the upturn.

“The challenges highlighted have been caused in part by government policies as a direct result of Brexit and the COVID-19 pandemic.”

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