UK businesses feeling pinch of energy price rises

New data published in the ONS’s Business Insights and Conditions Survey (BICS), suggests that more and more UK businesses are suffering as a consequence of recent increases in energy prices.

In the 52nd wave of its business survey, published on the 24th March and covering the period 7th-20th of the same month, the BICS began recording data on the impact of energy prices on UK companies. Over the past four waves of the survey this research has shown a growing proportion of businesses that have been impacted in some way. In the fortnight ending 20th March, 25% of responding companies stated that they had been impacted in some way, either through production being affected (5.9%), suppliers being affected (8.6%) or a combination of the two (10.8%).

Around a month later (the fortnight ending 17th April) this figure had risen to 29%, while in the fortnight leading up to 1st May this figure was 31%.

The latest dataset (covering the 16th to the 29th May) shows the total number of businesses affected by energy price rises has now grown to 33%, with small businesses (10-49 employees – 43%) and small-midsized businesses (50-99 employees – 44%) particularly hard-hit. Businesses in the accommodation and food service activities industry were also particularly badly affected, with two thirds (66%) experiencing some form of negative impact as a result of the price rises.

As a result, some 42% of these businesses had to absorb the costs and 27% being forced to pass the price increases on to customers. With this approach being unsustainable, and with the cost-of-living crisis showing no immediate signs of abating, it will be interesting to see what insight into the plight of these companies future waves of the data can tell us – and what knock-on impact it might have on the wider economy.

Publications such as the Business Insights and Conditions Survey, as well as countless others, provide valuable insight into the UK economic landscape, helping us advise our clients on the challenges and opportunities they face and informing their communications strategies to maximise both value and impact.