ONS data – worries about energy prices and supply chain chaos rising among businesses

  • 28% of all firms with 10 or more employees experienced supply chain issues over the last month.
  • 52% of businesses with 10 or more employees within the manufacturing industry reported global supply chain disruption in March.
  • Input price inflation (23%) and energy prices (20%); were the two main concerns among companies in late March.
  • Brent crude rises 2% to back above $103 a barrel as global supply worries continue.

The ONS has released a snapshot of inflation and supply chain concerns among businesses

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown:

‘’There were high hopes that by now the supply chain headaches induced by the pandemic would have eased, but instead firms are still in the grip of uncertainty, with the conflict in Ukraine and lockdowns in China leading to fresh stock fulfilment issues. Well over a quarter (28%) of businesses have experienced global supply chain problems in the last month, creeping up again from February’s level of disruption (26%). Manufacturing is the worst affected sector, with more than half of all firms experiencing disruption at a time when they are also facing the double whammy of soaring energy costs. Rampant inflation is increasingly a bug bear for business, with almost a quarter (23%) of firms reporting input price inflation a major concern. There has been a marked jump in the number of firms who are anxious about energy prices with a fifth of businesses (20%) citing them as a main concern, up from 15% in February.

It’s unlikely the uneasiness about rising costs will dissipate any time soon. The price of a barrel of Brent crude has crept steadily upwards again today by 2% to above $103, reversing some of yesterday’s losses. The planned release of 60 million barrels of emergency stocks by big oil consuming nations, on top of the 180 million set to be dripped in daily from US oil reserves, had helped assuage some supply worries. But this was short lived relief as with Russian troops reported to be regrouping in Ukraine, and no breakthrough in sight for the stalled Iran talks, worries about global supply show little sign of fading. The UK’s newly unveiled energy strategy offers scant relief from the financial pain of higher prices in the short term, with the focus on the longer term switch away from a reliance on oil and gas to nuclear and renewables.’’