GUERNSEY manufacturers are bearing up better than their UK counterparts in light of cost pressures from the credit crunch. The latest Industrial Trends survey from the Confederation of British Industry has found that UK manufacturers have been forced to raise the price of their goods due to persistently high costs and slowing demands.
But Confederation of Guernsey Industry director Peter Budwin, pictured, said that, on the whole, the island’s light industry was holding its own.
‘I’ve spoken to the relevant CGi members and there seems to be more positivity than here than in the UK. It appears the island’s manufacturers have not been as negatively affected by the credit crunch. No manufacturer is looking at any downturn in business this year, but none is looking at any growth, either. Considering that last year most businesses had a good year, then to be maintaining that is very positive in the current economic climate.’
The CBI survey blamed record oil-price peaks in the last three months for further stamping-down business confidence and lowering firms’ expectations for demand in the coming quarter.
Mr Budwin said some local manufacturers with links to the finance industry were seeing some projects being put on the back burner.
‘It could be the case that while Guernsey’s finance industry is doing well this year, the banks’ parent companies are holding back on expenditure in order to weather the storm in the UK, so certain projects are being delayed.’
The CBI survey found that in the last three months average unit prices rose for 65% of manufacturers, while they fell for just 7%.
As a result, firms have tried to offset some of the damage to their profit margins by raising prices.
For the past two quarters, domestic prices have risen considerably and export prices have also gone up at an accelerated rate.
Director of CBI South East, Malcolm Hyde, said cost pressures on manufacturers had been noticeable for more than four years, but were now at their most intense for nearly three decades.
‘It comes as little surprise that manufacturers are passing some of these costs onto customers, although this is unlikely to rescue profits from a margin squeeze.’
Article posted on 29th July, 2008 - 2.30pm
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