24th July 2008
'Fierce' cost increases are forcing manufacturers to raise the price of their goods, a Confederation of British Industry (CBI) survey has revealed.
Some 65% of manufacturers responding to the CBI's Industrial Trends survey said that their costs had increased in the second quarter, compared to just 7% who had seen costs fall – a positive balance of 58. A +27 balance of firms reported that they had raised domestic prices in the quarter, while a balance of +19 had increased export prices.
Firms' optimism fell for the fourth successive quarter, with a balance of -40: the worst since October 2001.
"Cost pressures on manufacturers have been noticeable for over four years but in the last three months they have been their most intense for nearly three decades," said the CBI's chief economic adviser Ian McCafferty.
"So, it comes as little surprise that manufacturers are passing some of these higher costs onto customers, although this is unlikely to rescue profits from a margin squeeze."
Costs force up manufacturers' prices
Some 65% of manufacturers responding to the CBI's Industrial Trends survey said that their costs had increased in the second quarter, compared to just 7% who had seen costs fall – a positive balance of 58. A +27 balance of firms reported that they had raised domestic prices in the quarter, while a balance of +19 had increased export prices.
Firms' optimism fell for the fourth successive quarter, with a balance of -40: the worst since October 2001.
"Cost pressures on manufacturers have been noticeable for over four years but in the last three months they have been their most intense for nearly three decades," said the CBI's chief economic adviser Ian McCafferty.
"So, it comes as little surprise that manufacturers are passing some of these higher costs onto customers, although this is unlikely to rescue profits from a margin squeeze."
Tags: Retail & Shop
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