Rising costs, both input and labor, have reduced confidence among Northern Ireland companies, according to a new study from the Northern Ireland Chamber of Commerce.
A quarterly economic survey conducted in collaboration with BDO NI found that expectations for price increases were record highs even before the financial crisis around 2008.
In the third quarter of 2021, 3 out of 5 companies showed a cost increase of more than 6% and 1 in 10 companies showed a cost increase of more than 20% in the last 9 months.
Behind the rising costs are the impact of the European Exit and the Northern Ireland Protocol, rising raw material costs, rising energy costs, rising wages and supply chain disruptions.
And this isn’t too far away, as two-thirds of manufacturers and 60% of service providers expect ticket prices to rise in the next three months.
At the same time, confidence among Northern Ireland companies in the third quarter of this year has lost momentum in the last few months, especially in the manufacturing industry.
On the other hand, hiring was also a big issue as companies increased their workforce in the wake of the pandemic.
A total of 70% of manufacturers and 74% of companies in the service sector are trying to hire, with the majority reporting that staffing is becoming more difficult.
Not surprisingly, wages are rising, with two-thirds expecting wages to rise in the next six months, 40% above inflation.
Ann McGregor, chief executive officer of the NI Chamber of Commerce, said the situation remains vulnerable, although there are positive signs of growth for Northern Ireland companies.
“There is a very positive momentum in the recovery of the business, and in some sectors and businesses, sales performance is very strong,” she says. “But business trading conditions are undermining these benefits with a combination of higher costs, supply chain and logistics issues, labor shortages and increased wage pressure.
“In summary, these factors are beginning to undermine the credibility of businesses, despite the company’s incredible efforts to recover from the pandemic. Profitability goes to the point where companies have no choice but to consider raising prices. It’s under pressure. This is a decision that members haven’t downplayed at this time.
“These findings clearly show that the post-pandemic economic recovery is losing momentum. To ensure that Northern Ireland’s business recovery is on track, for example, in the following budget and spending review: The UK Government’s decision should focus on actions that reduce the cost of Northern Ireland’s business rather than increase it and support leveling up. The agenda we continue to hear. Such actions we support. One is the introduction of a moratorium on all policy measures that will increase the cost of the rest of this parliament. “
Rising costs hurt confidence among Northern Ireland companies
Source link Rising costs hurt confidence among Northern Ireland companies