Inflation fears as firms fight on all fronts
You’ve heard me say it before - Lancashire’s businesses are phenomenal.
Innovators, exporters and world leaders; family businesses, businesses that care for their workforce, Lancashire businesses that ARE family.
Businesses that throughout the pandemic have kept manufacturing and exporting where they were fortunate enough to be in a sector that could.
And those manufacturers have seen multiple unsolicited headaches these last three years: Brexit stockpiling, rocketing transport costs, clueless customs officials, containers scattered across the globe, sky high fuel prices and vanishing raw materials supplies.
But these have all been flagged as transitory problems – ‘be patient and this too shall pass’ has been the message.
Through all this our firms have continued to export, to make money, to keep the economy moving, and very successfully too in many cases, with order books full, and making it all work despite the difficulties.
But now we’re looking at a different set of problems, and these look far from transitory.
Raw material prices are rocketing, they have been painful throughout the last two years, but now this is getting serious. Try finding steel - of any sort – or cement, timber, semi-conductors, exotic metals, copper. You name it, it’s in short supply, and prices are climbing.
Double-digit rises, some triple digits; steel prices at purchase only, making tendering impossible - if you can get any at all. Shortages pan-Europe with public sector contracts gazumping smaller private ones, and it’s holding back our economic recovery. Business deals that could be done, are having to be declined.
And all this is inflation in the making with the government’s current figures looking a woeful underestimate when you consider the USA is running at over four per cent.
The big question is: where next for the UK economy?
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