- Three in five (60%) of businesses not permanently stopped trading reported they have concerns for their business in the next month;
- The two top concerns were inflation of goods and services prices and energy prices.
- Among businesses in the accommodation and food service industry, 37% reported hourly wages were higher for existing employees in the last month, up 22% from January 2022
The ONS has released the latest data on inflation concerns, labour costs and supply chain issues among businesses.
Volatile Commodity Prices
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
"Volatile commodity prices roiling exchanges are turning into a ‘cost of commerce crisis’ as worries surge among businesses. At a time when nerves are being frayed over the impact the cost of living crisis will have on consumer spending power, firms are staring at the prospect of yet more overheating overheads.
In the latest snapshot from the ONS, three in five companies said they had concerns for the next month with the cost of goods and services and energy prices causing particular stress. More than a third of construction companies (36%) said goods price inflation was a real concern, while overall more than a fifth of firms said this was a worry.
The labour crunch is adding to the cost crisis for businesses, particularly for hotels, restaurants and bars where the fight for staff is forcing firms to push up up wages fast. 37% of companies said hourly wages were higher for existing staff, with more than a fifth more firms reporting this trend compared to January. Four fifths (80%) of businesses in the accommodation and food services activities industry say they have concern for business in the next month.
Despite hopes of an easing of global supply chain problems, that hasn’t yet materialised, with the issue still a headache for 16% of companies, the same level as in January. These are worrying trends, but there is a ray of good news. More firms are getting back up on their feet following the shock of the pandemic as restrictions have lifted. In late February, the percentage of currently trading businesses rose to 94%, its highest level since comparable estimates began in June 2020.
But testing times are ahead, as some of the most recent hikes on global exchanges have yet to feed through to company costs, so many firms are bracing themselves for a fresh bruising round of rising prices."
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