A fall in the value of sterling (most of our respondents were from the UK) was the other main worry. Those firms for which importing goods is a key part of their trade naturally tended to highlight this risk, although manufacturers were nearly as likely to see a weaker pound as a risk, highlighting the importance of input costs.
A tough operating environment, the effects of Brexit, and concerns over government policy also linger on the minds of businesses
Despite wider talk of a recovery, there is clearly some pessimism around at the moment, with several firms suggesting that the current environment is the most challenging they have ever faced. But crucially, and perhaps surprisingly, few mentioned covid as an explicit concern, whereas problems with shipping and staffing (or skills) were both frequently raised. Comments about inflation and costs were common, with many emphasising wider supply-side problems including elongated delivery times and lower reliability.
Although not explicitly the subject of any of the questions in our survey, Brexit was also raised frequently, with some quite detailed complaints about issues ranging from customs declarations to regulations and skills shortages. Risks relating to government policy and finance were also common themes.
But it wasn’t all doom and gloom, with some firms striking a more upbeat tone. Some suggested that the inflationary challenges they were facing were likely to be short-lived, while others stated they were still confident in the outlook for UK businesses and that they were continuing business as usual.