East Anglian exporters warn of price rises as pressures squeeze margins
PUBLISHED: 08:51 18 August 2017 | UPDATED: 08:52 18 August 2017
East Anglian manufacturers are continuing navigate the choppy waters of international trade – but have warned they will have to hand on price rises.
A survey from the British Chambers of Commerce found manufacturers were seeing strong demand from abroad, helped by the weak pound, though importers have had to adapt to deal with higher materials prices.
Two out of five members said they would have to increase prices in the next quarter, primarily because of rising material costs, with inflation and exchange rates also weighing on future planning.
Natural energy drink maker Youth Energy, based in Stowmarket, is one of those that has had to change its plans since last summer’s post-referendum sterling devaluation. It has brought forward a planned international expansion programme to relieve the pressure on its UK business.
Co-founder Jason Freeman, who started the £1.2m company with his wife Amanda, said: “We manufacture in Germany and the exchange rate is killing us. We were planning to focus on the UK market for the first two to three years initially.
“We launched in India about eight weeks ago and it has been very successful for us. We launch in Kenya in about six weeks and we are planning to move into Uganda and Ghana after that, before looking at the USA for a soft launch in a few months.”
Mr Freeman said the firm was predicting selling one million cans in India in the first year and 600,000 in Kenya.
Norfolk Chamber of Commerce saw an increase in documented export sales to £38.1m in the quarter to July, though orders stayed broadly flat. Suffolk Chamber found an increase in export sales reported by 41% of manufacturers, with inflation and exchange rates still the top concerns.
Julie Austin, Norfolk Chamber international trade manager, said: “Many businesses are seeing Brexit as an opportunity but are not able to make plans until they know what the outcome will be.”
Chris Brient, chairman of Norwich Airport-based Regional Freight Services, said: “Shippers’ volumes are still good and there is no noticeable slowdown. However, there is some nervousness about Brexit and possible tariff changes.
“It is all well and good the government saying it will do this – but businesses want them to get on and do it.”