A new survey of more than 1,000 UK businesses has shown that the overwhelming majority are hiking prices, as acute shortages of materials and cost pressures mount.
The survey, carried out by the British Chambers of Commerce (BCC) found that, when asked if they had seen a change in the price of their goods or services in the past year, 80% of respondents reported increases — with 46% reporting significant increases and 34% reporting slight increases.
Vehicle fuel, shipping containers and utilities were cited as the top areas of concern, throwing into focus the impact of skills and commodities shortages for UK firms.
Only 15% reported no change with only 2% reporting any kind of decrease.
“These figures present a deeply worrying picture of the difficulties that businesses are currently facing, across multiple fronts as supply chain disruption persists," said Shevaun Haviland, director general of the BCC.
“Unless action is taken soon, firms could be forced to cut back on their capacity or limit the range of products they offer."
For manufacturers the above question drew an even starker answer — 92% had seen an increase in the price of their goods and services.
When asked whether they, or any business in their supply chain, had experienced either increased costs or shortages of a variety of commodities over the past 12 months, 52% cited vehicle fuel, 34% shipping containers and 30% utilities such as gas or electricity.
Among manufacturers, 50% cited steel, 47% shipping containers, 45% vehicle fuel, 39% paper or cardboard, 38% plastics or rubber, 29% chemicals and 19% semiconductors as having seen a price bump. Only 2% of manufacturers reported that they had not faced increased costs or shortages from the items listed.
“While there are some global issues at play, there are levers that the government can pull to improve current business conditions, for example, the introduction of an energy price cap for SMEs and providing more temporary visas in the hardest hit sectors through expansion of the Shortage Occupation List," said Haviland.
"Firms also want to see a moratorium on all policy measures that increase upfront business costs for the remainder of this parliament."
Half (50%) of businesses surveyed reported that either they, or others within their supply chains, had experienced skills shortages in the past 12 months.
This figure rose to 75% for larger firms with over 50 employees and was least prevalent among firms employing less than 10 people at 31%. Roles commonly mentioned included HGV drivers, engineers, warehouse staff, accountants, chefs and IT technicians.
Watch: What is inflation and why is it important?