London, July 22, 2021 (AFP)
UK manufacturers are booming as the economy recovers from Covid turmoil, but the outlook is clouded by soaring costs and self-isolating staff, a key survey showed Thursday.
Manufacturing output volumes surged in the three months to July, according to a survey of 250 businesses from the Confederation of British Industry (CBI).
Manufacturers enjoyed the joint highest expansion since 1995, with strong performances for motor vehicles, transport equipment, food and tobacco, it added.
"Record growth in manufacturing output volumes is further evidence that UK industry is reawakening following the economic ravages of the pandemic," CBI chief economist Rain Newton-Smith said in a statement.
"Demand is rising rapidly, leading businesses to hire more staff and plan further investment in plants and machinery and training," she added.
However, many firms face cost pressures and supply challenges, despite recovering economic growth and resurgent demand after England fully emerged from lockdown.
The CBI also urged the UK government to re-think its Covid isolation policy -- which has sparked millions of staff absences and fears of supermarket food shortages.
"Challenges lie ahead. Acute staff shortages evident across the economy are biting deeply within manufacturing, with skills in short supply and the number of people isolating climbing steeply," added Newton-Smith.
"Businesses have already endured a prolonged period of inhibited demand, so it is vital that government now takes all possible steps to protect this resurgence in activity.
"In the short-term, that should mean an immediate rethink on self-isolation rules."
Millions of workers are currently forced to stay at home under the so-called "pingdemic" after being contacted, or pinged, by a phone app which orders them to self-isolate, or by health authorities conducting contact tracing.
The business lobby wants the government to consider more measures to free up staff.
"A test-and-release system which enables healthy people to return to work would help, as would freeing double-jabbed people from isolation obligations," added Newton-Smith.
"This would ensure manufacturers can operate at full capacity, and work towards capitalising on a swift recovery."
The CBI added that UK manufacturers also suffer from runaway cost pressures, echoing a warning from British consumer goods group Unilever.
"Manufacturers continue to face significant cost pressures, off the back of ongoing global supply disruption," it noted.
"Looking ahead to the next three months, firms expect output volumes growth to accelerate further, but they also report heightened concerns about shortages in materials, plant capacity, and skilled labour acting as constraints on activity."
Costs are soaring at their fastest rate for over 40 years due to chronic shortages of commodities and semiconductors, it added.

Sumber : AFP