2 in 3 manufacturing SMEs impacted by supply chain issues

Survey findings revealed almost three quarters (71%) of small businesses within the manufacturing sector have experienced supply chain issues, while more than half have experienced staff shortages. The combination of the supply chain issues and staff shortages has financially impacted 61% of small businesses within the sector. 

37% of manufacturing SME owners described the negative financial impact the supply chain problems are causing on their business as significant and 70% stated they expect the staff shortages and supply chain issues to get worse before they get better.  

As for the festive period, 27% expect the supply chain and staff shortages to cause major disruption to their customers and 31% expect the issues to cause moderate disruption.  

How are businesses adapting? 

Business owners within the manufacturing sector are adapting their business in response to the ongoing supply chain and staff shortages issues in a bid to continue trading as well as they can. 

In response to the supply chain issues, 28% business owners said they have already reduced the volume of stock they produce and 26% have had to change or delay their businesses growth plans.  

Over the course of the next three months, 34% of businesses owners said they plan to reduce their businesses trading hours and 34% said they plan to limit or change the services which they provide.  

Business adaptations in response to the ongoing supply chain issues 

Business adaption in response to the supply chain issues 

Customers are facing the brunt of the supply chain issues, as 21% of business owners state they have already raised prices for consumers. 30% state they plan to within the next three months and one in five plan to do so within the next three to six months.  

Of those that have increased prices in response to the supply chain issues, 26% have increased their prices by 5-10% and 17% have increased their prices by 20-30%.  

How long will the issues last and what support is needed? 

63% of small business owners within the manufacturing sector believe the issues with both the supply chain and staff shortages are set to continue for more than five years. 

With that in mind, small business owners within the sector are calling on the government for support as these issues continue.  

34% are calling for tax breaks specifically for small businesses to help overcome the financial implications both issues are causing.  This is followed by paid training programmes , specific SME support packages, and emergency visas.

Sandra Rowley at card payment solutions provider takepayments limited said: ”Until the supply and staff shortage issues are overcome, small business owners across the UK could continue to be hit by negative financial implications. Which may ultimately lead to further price increases for consumers."

Small businesses within the manufacturing sector are calling on the government to introduce a tax break to help them financially navigate through this climate. This support would help relieve the financial pressures their businesses are facing, whether it’s increased stock costs due to supply issues or delaying the growth of their business.” 

The full findings of the takepayments Staffing and supply shortages report are available to view here.