Rising costs for both inputs and labour has dented confidence amongst Northern Ireland businesses, according to a new survey from the Northern Ireland Chamber of Commerce and Industry.
Its Quarterly Economic Survey, which is carried out in conjunction with BDO NI, found that expectations to raise prices are the highest on record since before the financial crash around 2008.
Three in five firms saw costs rise by 6% or more in the third quarter of 2021 while one in 10 firms saw costs rise by more than 20% over the last nine months.
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Behind the cost increases are the impact of European Exit & the Northern Ireland Protocol, rising raw material costs, rising energy costs, wage increases and supply chain disruption.
And the increases aren’t far off with two thirds of manufacturers and 60% of service businesses expecting up ticket prices in the next three months.
At the same time, confidence in the third quarter of the year amongst Northern Ireland businesses lost the upward momentum of the last few months and fell, particularly for manufacturing business.
Meanwhile, recruitment was also a big issue as companies built up their workforce in the wake of the pandemic.
A total of 70% of manufacturers and 74% of companies in the services sector were trying to recruit with the majority reporting that it is becoming increasingly difficult to get staff.
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Unsurprisingly, wages are rising with two thirds of businesses expecting to increase wages in the next six months, 40% of which will be above the rate of inflation.
Ann McGregor, Chief Executive, NI Chamber said there are positive signs of growth for Northern Ireland companies but conditions remain fragile.
“We have seen some really positive momentum build in business recovery and for some sectors and businesses, sales performance is now very strong,” she said. “However, business trading conditions are undermining these gains with a combination of higher costs, supply-chain and logistics problems, increasing labour shortages and wage pressures.
“Taken together, these elements are beginning to erode business confidence despite the amazing effort by firms to build back from the pandemic. Profitability is being squeezed to the point where businesses have no alternative but to consider increasing prices, a decision that isn’t taken lightly by our members at this time.
“These survey results clearly indicate that our post pandemic economic recovery is losing some of its momentum. To keep business recovery in Northern Ireland firmly on track, any decisions by the 海角视频 government, for example, in the forthcoming Budget and Spending Review, should focus on actions that reduce, rather than increase, costs for Northern Ireland businesses and support the levelling up agenda that we keep hearing about. One such action which we would support would be the introduction of a moratorium on all policy measures that increase business costs for the remainder of this parliament.”