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96% of SME manufacturers struggling with price changes

A new report has revealed that price changes driven by supply shortages, rising transport costs and reduced market capacity are currently affecting almost every SME manufacturer in the UK.

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A national quarterly survey of SMEs run by the South West Manufacturing Advisory Service (SWMAS) found that the cost of raw materials for some SMEs had increased by up to 350 per cent in some instances. Other companies were facing lead times of up to a year.

The problem is part of a wider ‘perfect storm’ of issues that is currently plaguing industry, including raw material shortages, haulage delays due to a lack of drivers and continuing challenges related to COVID-19 and EU Exit.

According to the CBI, UK manufacturers are now facing the worst stock shortage on record. Well-known companies such as Nando’s and McDonalds are among those to have been caught short-handed, with some reports suggesting that major corporate buyers are even resorting to chartering their own ships to secure supplies.

Nick Golding, Managing Director of SWMAS, said:

“It appears we are seeing the first signs of supply chain struggles starting to hinder the upturn [in manufacturing output]. Freedom of movement is adding to recruitment pain, whilst problems securing raw materials seems to be partly due to logistics challenges of importing goods.

“To address this, companies are taking steps to increase and protect their own inventories, often paying extra to get what they need. Firms are having to compete for scarce resources, which is driving the significant price increases we are seeing.”

Greater Manchester manufacturers suffering supply chain problems are encouraged to contact our specialist Manufacturing Service for fully-funded advice and guidance.

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