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Suzhou Arenland Automotive Technology co.,ltd

Home > News > Raw materials and customs fees driving rise in costs for manufacturers

Raw materials and customs fees driving rise in costs for manufacturers

Increased shipping and customs costs, as well as shortages in raw materials, drove input price inflation in the manufacturing sector to the highest level in four years.

While some of the businesses surveyed mentioned higher raw material prices, most anecdotal evidence pointed to higher shipping and customs costs associated with the new UK trading arrangements as the main driver of higher input costs.

On the back of this, manufacturing output prices rose the most since March 2011. These cost increases were then passed on to customers, according to the PMI.

The PMI is a single-figure indicator of manufacturing performance. It includes indicators for new orders, output, employment, suppliers` delivery times and stocks of purchases.

New orders and output in the sector fell for the second month running. New work fell mainly as a result of tougher lockdown measures. The post-Brexit trading environment was also mentioned as a factor. Output fell at the steepest level since May 2020.

Last month the PMI recorded a reading of 52. Anything over 50 indicates overall improvement of the sector.

During the month severe pressure on supply chains remained, with delivery times lengthening again to a near-record degree.

Oliver Mangan, AIB chief economist, said: [Tight Covid lockdown restrictions, both here and elsewhere, are creating a challenging backdrop for businesses, with firms reporting weak demand. As a result, there was a further marked decline in manufacturing output in the month, with order backlogs continuing to fall too."

However, employment rose for the fifth month running.

Meanwhile a report from InterTradeIreland has found that businesses are continuing to struggle, hit by both the end of the Brexit transition period and the global pandemic.

Half of firms report that they are now contracting, winding down or surviving at all costs, according to InterTradeIreland`s latest business monitor covering the last three months of 2020. This compares to just 13pc in the corresponding period of 2019.

InterTradeIreland`s quarterly report is based on the views of more than 750 business managers across the island of Ireland.

Businesses are more likely to cite Covid-19 alone as the main impact on their operations, (61pc); just 5pc of companies said Brexit alone had caused an impact on their operations.

However, almost one in three firms say that both developments are playing a role in their current business concerns. The survey found that 58pc of businesses continue to struggle with reduction in demand for goods and services, low business and consumer confidence and the subsequent impact on their cash flow.

Kerry Curran, InterTradeIreland`s assistant director of strategy and policy, said: [Businesses are currently in the unenviable position of facing the dual tests of the pandemic and the end of the Brexit transition period.

[While no sector is immune from the ongoing challenges, the data reveals that cross-Border traders and exporters are beginning to see sales losses moving in the right direction."

Suzhou Arenland Automotive Technology co.,ltd
Business Type:Organization , Trade Company
Product Range:Auto Electronics , Cooling System , Other Auto Parts
Products/Service:Car Radiator , Car Oxygen Sensor , Aluminum Radiator , Car DVD Player , Car Media Player , O2 Sensor
Company Address:No.68, Changyang Street, Suzhou, Jiangsu, China



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