Goods worth almost £2bn are awaiting completion in South West manufacturers’ warehouses because of supply chain delays, a report has found.
Eight out of 10 firms across the region who took part in the study by Barclays Corporate Banking said raw materials, ingredients or component parts had not yet been delivered from suppliers.
The bank said this “unfinished business” was worth around £790,000 to each company impacted.
Around six in 10 companies reported they were still facing supply issues that began with the start of the Covid-19 pandemic, with some citing the war in Ukraine and the aftermath of Brexit as having “exacerbated” the problem.
A similar number said this was impacting relations with customers as they have had to wait longer for products. More than half added they were planning to increase their prices to offset rising costs such as energy and transportation, by an average of 45%.
In response, Barclays said around a third of the South West firms it had spoken to had increased their own storage capacity and brought parts of supply chains either closer to UK operations or inhouse.
Lee Collinson, head of manufacturing, transport and logistics for Barclays Corporate Banking, said the sector had faced “a perfect storm” of challenges this year, including ongoing Covid lockdowns in China.
He added: “However, manufacturing firms have done what they do best and engineered new solutions to limit the impact of the issues they face. As a result, many businesses will enter the new year with a degree of cautious optimism and confidence.”
The study found more than two fifths (42%) of South West manufacturing firms had been seeking private equity investment to maintain cash flow and liquidity. More than three quarters expected the situation to improve over the next six months, while 90% were confident about growth next year.
Nationally the report, which spoke to senior executives of around 630 manufacturing firms in October, estimated £9bn of steel and metals products, £3bn of food and drink, £2.6bn of plastic goods and £2bn of electronics remained unfinished because of supply logjams.
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