Supply chain disruption hitting firms, survey shows, but confidence for 2022 is high

January 8, 2022

More than three-quarters of manufacturing firms across the West of England have been affected by delays or other disruption when importing supplies or goods, according to the latest economic survey by the regions largest business group.

Two-thirds of all importers have also been affected, triggering a fear among many firms that their prospects will be hit this year unless the issue is resolved. 

Some 70% of manufacturers are now concerned about ongoing disruption to their supply chains, according to the results of the quarterly survey conducted by Business West, the organisation that runs the Swindon & Wiltshire Initiative.

It said the findings showed overwhelming concern among businesses about input and stock availability.

The survey results echo recent reports showing that UK economic growth is slowing due to global scarcity of materials, staff shortages exacerbated by Brexit, and transport delays occurring simultaneously due to an increase in demand.

Common issues faced by manufacturers include delays of up to 12 weeks or more for deliveries from Europe and Asia, shortages of materials such as steel and wood, exponential price increases of shipping containers, and UK-based companies being dropped by EU suppliers.

Some 55% of the near-350 firms taking part in the survey said they had been impacted by national and global supply chain problems over the past year. 

This percentage rose to 82% in the manufacturing sector, where delays have been a persistent headache, with a third reporting disruption had got worse since the summer and 39% indicating that the had issue persist but had not been aggravated.

However, despite the uncertainties and difficulties linked to Covid-19 and Brexit, the survey showed that 2021 was a year of recovery for the domestic market.

Thirty-eight per cent of firms increased domestic sales during the three months leading up to Christmas and the year ended with an upward trend in net UK sales and orders.

And while businesses are facing a myriad of hurdles in the short and long-term, 35% said they were confident about the prospects for the UK economy this year.

Confidence among directors, owners and managers in their own businesses was stronger still on positive news on the vaccine rollout and economic reopening – 62% said they were confident about their firm’s performance over the next year.

Business Link pointed out that, with new customs checks introduced this month, firms will need to ensure they are prepared to avoid unnecessary delays and extra costs.

While last year importers of goods from the EU had the option of delaying submissions of customs declarations, full customs entries must now be submitted.

Ports and other border locations have also introduced customs controls on goods moving into Great Britain from the EU and firms also need to provide a declaration to confirm a good’s origin at the time they export the goods.

Business West managing director Phil Smith said the survey results showed that despite businesses’ economic recovery and progress following the challenges of the past two years, hurdles still remained.

“It is troubling to see the difficulties businesses in the manufacturing sector are facing, particularly during what should be a profitable time for firms,” he said.

“The challenges caused by disrupted supply chains must be addressed to keep businesses on an upward trajectory after a promising start this time last year.”

Firms affected by import changes can visit the Business West website to find out about support available – or phone 01725 370712.

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