Record numbers of manufacturers are raising prices in the face of strong inflationary pressures which show little, if any, sign of abating.
According to the Make UK/BDO Q4 Manufacturing Outlook survey, UK prices rose to their highest ever balance, +52%, in the survey’s 30-year history, this now being the third consecutive quarter of record-breaking figures for our UK Prices metric.
To give an indication of just how sharply inflation has bitten, and how manufacturers have responded, the equivalent balance in Q4 2019 before the onset of the pandemic and leaving the EU was just +5%.
The figures come just ahead of the next meeting of the Monetary Policy Committee and a decision on interest rates which is expected to be finely balanced.
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 anytime soon
James Brougham
Senior Economist, Make UK
Manufacturers faced a brutal 10% decline in output in 2020. This year, they rebounded proudly with some record-breaking figures. While challenges clearly still lie ahead, they can enter 2022 on significantly firmer footing than last year.
