In June 2021 the cost of running a factory increased at a record rate. This news caused concerns that prices of British-made goods will rise during the second half of 2021. According to the IHS Markit monthly survey of the manufacturing industry, manufacturers paid higher prices for essential manufacturing components and raw materials in June than in April and May which were record increases in themselves.
MAKE UK (an industry lobby group for businesses in manufacturing and engineering) said its members were holding back from increasing prices earlier this year, as they wanted to see if the cost of materials would start to level off. However, because the prices of materials have continued to increase, manufacturers are now starting to increase prices for consumers. This trend is most likely to continue until the end of the year.
Economist James Brougham, who works for MAKE UK, has said that a number of different factors are causing prices for key components and materials to increase. Firstly, there is an increasing global demand for these components and materials as lockdown measures continue to ease. Secondly, the current supply issues are made worse in the UK because Brexit is still causing delays at UK ports.
The Bank of England governor has recently said that inflationary pressures would continue for several months. He predicts that we are likely to see a recovery to our previous trend of low growth and low inflation laver in 2021.
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At Hawsons we have a dedicated team of manufacturing and engineering accountants at our offices in Sheffield, Doncaster, and Northampton. Our specialist team offers a wide range of services which are tailored to meet your individual needs. Our understanding of the issues faced by the manufacturing and engineering businesses means that we can proactively seek out ways for you to maximise your profitability and minimise your tax liabilities.
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