Manufacturing demand soars, but rising shipping costs and ‘pingdemic’ loom large

“With the full easing of Covid-19 restrictions now starting to take effect, UK manufacturers are continuing to reap the benefits of pent-up demand driven by the majority of Brits choosing to ‘staycation’, coupled with renewed economic confidence which is boosting
consumer spending and investment. 

“Many manufacturers are in a relatively robust financial position having remained open through large parts of previous lockdowns and having continued to see steady demand, which is now soaring. Business owners are cautious about overextending capital
commitment; however we’re seeing a greater willingness to invest in new production facilities and equipment, supported by recent incentives such as capital allowances. 

“While benefitting from increased demand, manufacturers are now facing the challenge of substantially increased shipping costs, in addition
to disruption from staff having to isolate due to the ‘pingdemic’. Staffing costs are also rising as demand for workers intensifies, leading to labour shortages in certain areas, such as in particular in the food manufacturing and automotive sectors, and
greater powers for workers to demand pay increases. This is leading to higher production costs at the factory gate and price rises becoming more commonplace. However, we would expect the buoyant results of recent PMI to continue over the next few months.”