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Highlights
- In early 2022, there has been a sharp rise in the net balance of manufacturers (58 per cent) who raised their prices, up from 52 per cent at the end of 2021.
- The prevailing inflation situation has put additional pressure on the Bank of England to raise interest rates for the third time since the pandemic.
A record-high number of UK manufacturers are raising prices to their highest. Rising inflation due to the Covid pandemic has further been escalated by the ongoing Russia-Ukraine crisis. The prevailing inflation situation has put additional pressure on the Bank of England to raise interest rates for the third time since the pandemic.
According to the survey results released by the trade body Make UK, which represents manufacturers in the UK and accountants BDO, in early 2022, there was a sharp increase in the net balance of 58 per cent of manufacturers who had raised their prices, up from 52 per cent at the end of 2021. The quarterly rise marked the fifth increase in a row. It is also the highest price rise since the survey started for the first time in 2000.
The survey, which was conducted during the period February 1 to February 21, included 287 companies. In 2019, before the UK exited from European Union (EU) and the pandemic started, the balance stood at just +5, UK manufacturers trade body said.
Chief Executive at Make UK, Stephen Phipson, said that companies are now facing higher increases in costs. He called on finance minister Rishi Sunak to use his Spring Statement scheduled on 23 March 2022 to support companies by providing more tax relief. He also urged the chancellor to extend a two-year tax incentive for business investment, which is slated to end in 2023.
The survey results also revealed that output and orders were down, though going by the past performance were in a better position. For the second quarter, employment growth and investments aim to increase slightly, and expectations remain optimistic.
Let us look at three FTSE-listed manufacturing stocks and see how they are faring on the stock exchange.
BAE Systems Plc (LON: BA.)
British multinational arms security and aerospace company BAE Systems Plc has recently completed the acquisition of Bohemia Interactive Simulations, which is a leading developer of advanced military simulation and training software using, for around £150 million after receiving regulatory and customary approvals.
BAE Systems Plc’s shares closed at GBX 733.00, down by 0.16%, on 11 March 2022.
The market cap of the FTSE100-listed company stands at £23,082.18 million as of 11 March 2022. The company has given a one-year return of 48.53% to its shareholders, however as of 12 March 2022.
Related Read: BAE Systems, Babcock, Clarkson: Should you buy these shipping stocks now?
Rolls-Royce Holdings Plc (LON: RR.)
It is one of the largest aerospace and defence companies. Rolls-Royce Holdings Plc Chief Executive Warren East, has recently decided to step down at the end of 2022. Warren East has served the company for nearly eight years as CEO.
Rolls-Royce Holdings Plc’s shares closed trading at GBX 93.51, on 11 March 2022.
The market cap of the FTSE100-listed company stands at £7,824.54 million as of 11 March 2022. The company’s shares have been struggling since the beginning of the year and have given negative returns.
Related Read: John Menzies, Clipper Logistics: Top FTSE All-Share stocks to invest now
Chemring Group Plc (LON: CHG)
Chemring Group Plc is engaged in manufacturing and installing key equipment needed to transform street lighting from gas to electricity.
Chemring Group Plc’s shares closed at GBX 321.50 on 11 March 2022. The market cap of the FTSE250-listed company stands at £910.33 million as of 11 March 2022. The company has given a one-year return of 23.65% to its shareholders.
