- One in eight businesses (13%) were affected by industrial action in October.
- More than a quarter (27%) of those businesses reported they were unable to obtain goods they needed.
- The hospitality sector had the highest proportion of firms reporting concern for their business, with 93% of firms worried about what December will bring.
- Almost a third (32%) of businesses have been experiencing a shortage of workers.
- The human health and social work activities industry reported the highest proportion of businesses affected by labour shortages, at 54%.
- Two in five (41%) businesses importing in October 2022 said they had experienced an increase in transportation costs compared with September.
The Office for National Statistics has released its Business Insights and Conditions Survey.
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Strikes Are Taking A Toll On UK Businesses
Waves of industrial action are having a crippling effect on British businesses and problems are set to pile up further as fresh strikes hit the UK in December. Already in October, one in eight companies said they were affected by walk outs.
The toxic combination of rail and postal strikes are taking a heavy toll on firms, with a quarter of those affected unable to obtain the necessary goods for their business. Another 24% of businesses said they were unable to operate fully, while 23% couldn’t get hold of the services they needed.
With many more strikes expected in the run up to Christmas the action will cause fresh ripples of worry for companies which are desperate to fulfil orders given the deadlines consumers and business clients often set ahead of the holidays.
The wholesale and motor trade was the business sector with the highest number of firms affected (18%) given how reliant they are on small components ordered online to be delivered.
With trains repeatedly cancelled the strikes are causing commuting chaos at a time when businesses were already dealing with some pretty hefty transportation challenges. Two in five (41%) businesses importing in October 2022 reported they had experienced an increase in transportation costs compared with September.
The walk-outs risk causing another migraine for pubs, hotels and restaurants, given the risk of a cancellation of bookings at such a crucial time of the year. The hospitality sector had the highest proportion of firms reporting concern for their business, with 93% of firms worried about what December will bring.
This widespread strike disruption comes at a time when firms are also weighed down by the labour crunch, with almost a third of businesses (32%) reporting they are dealing with a shortage of workers.
The crisis in the medical and care sector is particularly acute with more than half of firms delivering health or social care services fighting against labour shortfalls (52%). This shows just how fragile the sector is, and it’s now bracing for the potentially brutal effect of strikes by nurses and ambulance staff.
Workers are desperate for their pay rises to keep up with inflation, but the fear is that acceding to demands could embed the price spiral into the economy, because it adds to the onerous costs companies and organisations are having to bear. The risk is that companies in a bid to survive will pass on the costs to end users and consumers.
Already there are signs that this is happening. More than one in six (17%) businesses reported their employees’ hourly wages had increased in October. With the playing field so uneven in terms of pay rises though it’s likely to add to the determination of workers to continue to line up on the picket lines.’’
Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
