A recent survey of firms in Northern Ireland found that well over three quarters of these firms were expecting to significantly raise their prices over the next few months, with the main reason being the rocketing cost of raw materials.
Ukraine A Catalyst For Escalating Energy Prices
The war in Ukraine has certainly been a catalyst for the escalating energy prices that are now blighting the economy and adding to the cost of living crisis in Northern Ireland. Inflationary pressures are increasing with businesses seeing no other way forward than to increase their prices to the consumer. With the cost of living crisis there is also the added pressure of employees wanting a wage rise so that their wages stay consistent with the rises in inflation.
Trading In A Hugely Complex Economic Climate
Speaking to the Belfast Newsletter, Ann McGregor, chief executive of the Northern Ireland Chamber of Commerce, commented on these issues, saying:
“Businesses are trading in a hugely complex economic climate, including a perfect storm of cost pressures that now also has to take into consideration the fall-out of the war in Ukraine.”
She continued: “The most striking issue is the extent to which inflationary pressures are impacting on businesses, especially manufacturers.
“Deteriorating cash flow positions are concerning, as this leaves firms more vulnerable to economic shocks, including the damaging impact of soaring energy bills, higher inflation, and tax increases.
“Northern Ireland has had skills gaps for years, but the skills crisis is now becoming tangible, to the extent that in quarter one, 2022, 91% of manufacturers and 86% of services were finding it difficult to get staff.
“While it is good to see that a majority of businesses were trading positively in quarter one, there is concern that our recovery from the pandemic is slowing down as a result of significant cost pressures businesses in all sectors are facing.”
All these issues of course are not just affecting Northern Ireland, they are affecting the whole of the UK and further afield. There is certainly no easy solution to the problems that energy prices are going to cause to both businesses and the general public over at least the next few months. It is hoped that we can become less reliant as a nation on importing gas and oil over the course of the next few years and look closer to home for sources of energy, not least looking at producing a lot more renewable sources of energy which we need to do anyway to seriously cut down our carbon emissions.