Record number of manufacturers expecting price increases - CBI
The proportion of UK manufacturers expecting to raise prices in the next three months hit a record high in March amid inflationary pressures, according to a survey released on Tuesday by the Confederation of British Industry.
The balance of manufacturers expecting to lift prices rose to +80 from +77 in February, hitting the highest level since the question was first asked in the survey in 1975.
Meanwhile, total order books matched the record level seen in November last year at +26%, compared to +20% in February.
Tom Crotty, group director at INEOS and chair of the CBI Manufacturing Council, said: "It is positive to see that total order books remained strong in March, with export orders above normal to the greatest since extent since March 2019. Manufacturing output volumes also grew at a significant pace in the first three months of 2022.
"However, the Ukraine conflict has created further headwinds to an already challenging context for the manufacturing sector. The primary business focus is of-course on supporting the humanitarian crisis and evaluating their operations in Ukraine and Russia. But the shock to energy and other commodity markets, along with the potential for trade spillovers, will further add to the cost-of-living squeeze. Manufacturers will be looking to the upcoming Spring Fiscal Event to provide support through these challenges."
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: "Note too that many manufacturers will not have experienced yet the rise in energy costs triggered by Russia’s invasion of Ukraine when they were surveyed in early March, so output price inflation might strengthen even further over the coming months.
"With the incomes of end consumers unlikely to rise as quickly as the price of manufactured goods, we continue to expect the recovery in manufacturing output to falter in the second half of this year."
The survey was conducted between 24 February and 14 March.