Record numbers of manufacturers are raising prices in the face of inflationary pressures, a study suggests.
Manufacturing organisation Make UK and business advisers BDO said their research indicated that while growth remained positive, there was evidence of slowing activity.
Anecdotal evidence from companies suggested that price rises of around 10% are a regular occurrence and are passing by without a response from customers, suggesting such inflation is becoming built in, said Make UK.
Senior economist James Brougham said: “While manufacturers will be able to enjoy some festive cheer this year, their spirits will be tempered by the eye-watering impact of escalating cost pressures which are leading an increasing number to pass these on to the consumer.
“Given the global nature of some of these pressures there is little sign that they will abate any time soon.
“However, they will hope as we enter a fresh year that these will gradually unwind, with the compensation being that demand prospects among their major markets continues to look reasonably strong.”
Richard Austin of BDO added: “Orders and output are still very positive compared to historical figures, but costs pressures – input prices, labour, logistics and inflation – are settling in for the long haul.
“Investment levels, while stable, remain subdued despite good government policy in the shape of the super deduction tax and an extension to the Annual Investment Allowance.
“It’s a balancing act for manufacturers and we’re starting to see the impact of that in the form of more conservative expectations as we enter 2022.”
The report was based on a survey of more than 300 companies.
