COSTS SOAR: Firms are feeling strain (Image: getty)
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It comes as businesses called for Government help as they face record increases in costs.
Their struggle was highlighted in a survey that showed prices for UK exports increased for the fourth successive quarter.
The poll of nearly 300 firms by Make UK and business advisory firm BDO took place before Russia’s invasion of Ukraine.
Now, substantial rises in energy and raw material costs will likely have pushed prices even higher, the report warned.
Almost one in 10 said increases in energy and raw materials prices were a threat to their business.
Make UK is urging Chancellor Rishi Sunak to use his Spring Statement to delay the planned increase in National Insurance and examine other ways to ease business costs and boost investment.
Stephen Phipson, Make UK’s CEO, said: “Companies are facing eyewatering increases in costs, which are becoming a matter of survival for many. While some of the increases are driven globally, the Government cannot use this as a shield from the fact some are self-imposed and, added together, are now forming a perfect storm for companies.
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“As a result, the most immediate priority for the Chancellor in the short term must be to use his statement to do whatever it takes to support companies through this difficult period.
“The alternative is to leave many businesses facing a tipping point from which some will simply not recover.”
Richard Austin, head of manufacturing at BDO, said: “Supply shortages are severe and we are seeing a worrying widening of the gap between supply and demand.
are feeling strain “Manufacturers on the whole are currently managing to meet demand, but this will be difficult to sustain.
“Costs are rising at a speed that they cannot respond quick enough to.
“Combined with supply chain disruptions which will sadly now be exacerbated by the invasion of Ukraine, manufacturers will be turning to the Chancellor for immediate action.”