Manufacturers gloomy as record costs force up prices
Manufacturers express gloom over rising costs
Manufacturers have continued to raise the prices of their goods, in the face of the fiercest cost increases since 1980, the latest CBI Industrial Trends Survey shows.
There is evidence of a widespread loss of business confidence, the CBI says.
“Cost pressures on manufacturers have been noticeable for over four years but in the last three months they have been their most intense for nearly three decades,” the CBI’s Ian McCafferty said.
In the last three months, average unit costs rose for 65 per cent of manufacturers, while they fell for just 7 per cent. The resulting balance of plus 58, the highest since October 1980, comes on the back of soaring oil prices, up by over a third in the last quarter alone.
Firms expect costs to increase at a similar rate in the next three months.
Firms’ mood about the business situation darkened considerably for the fourth quarter in a row, but this time sentiment has taken an even greater dive – the balance of minus 40 is the weakest since October 2001 (minus 54).
Levels of activity in the last three months held up reasonably well, however, with firms reporting manufacturing output as flat, much as expected.
While domestic orders fell markedly again for manufacturers, export orders held up well and were broadly stable, the survey shows.