Confidence has “flatlined” in food and drink industry boardrooms as pressure grows on the government to avoid further blows in the forthcoming budget.
A new survey of its members by the FDF found confidence levels in the second quarter of the year were still at “-40%”, little changed from its verdict on Q1.
The low confidence factor has also increased the spectre of future job cuts, with nearly half of manufacturers expecting to reduce headcount in the next year.
Prior to the last budget, confidence levels had been steady at –6% according to the same survey.
The latest results found 84% of manufacturers believed the ongoing impact of recent government policies was one of their biggest concerns for the next 12 months, while 41% expected to lay off staff.
With production costs up 6.3% in the past 12 months and expected to rise a further 3.6% in the next year, the FDF called on the government to ensure its upcoming budget doesn’t add further pressure to the “already squeezed” sector.
“Businesses are continuing to grapple with the impact of last year’s budget alongside steadily rising input costs, so it comes as no surprise business confidence across food and drink manufacturers remains strikingly low,” said FDF CEO Karen Betts.
“Companies are nervous about this autumn’s budget. It’s critical the Chancellor does not increase costs to hard-pressed businesses further, but instead acts decisively to attract new investment into our sector.
“Energy, commodity, transport, employment and other costs are rising across the board, on top of the growing costs of regulation. As before, companies will try to shield consumers for as long as possible, but this means inevitably shop prices will rise. These are particularly marked at the moment in meat, dairy, chocolate and coffee.”
No comments yet