Manufacturing costs rising fastest since 1980

Manufacturing & Distribution

A recent Guardian article informs that a CBI survey shows cost pressures for Britain’s factories are growing at their fastest pace since 1980 as companies struggle to find workers to meet growing demand. 

The CBI warned that higher manufactured goods prices were inevitable after its monthly healthcheck of the industry showed large labour shortages. Orders are picking up over the three months to January, but output growth was limited by bottlenecks. 

According to the CBI’s industrial trends survey:

  • Average costs growth accelerated at the fastest pace since April 1980.

  • Average domestic price growth in the quarter to January was similar to October, which was the highest figure since April 1980 and is anticipated to accelerate over the next three months.

  • Average export prices in the quarter to January grew at their quickest pace since April 1980 and price growth is again expected to pick up over the coming quarter.

  • The share of firms citing skilled labour as a factor likely to limit output next quarter rose to its highest since October 1973.

The annual rate of inflation as measured by the consumer prices index hit its highest level in almost 30 years in December, and is set to climb further from 5.4% to at least 6% over the coming months.

Polestar has a lot of clients and investors in the manufacturing and industrial space, so these costs are important to the valuation of their companies. We have background knowledge in the manufacturing field from sector valuations and previous deals. Alongside that, we can introduce you to many key contacts that may help with some of your problems today.

As always, if you are interested, please reach out!

Newton-Smith said government action was needed to ease cost pressures from spiralling energy bills and to encourage investment.

By Anusheh Khan on 31/01/2022