Newspaper article The Evening Standard (London, England)

...But Price Competition and Raw Materials Put Squeeze On

Newspaper article The Evening Standard (London, England)

...But Price Competition and Raw Materials Put Squeeze On

Article excerpt

Byline: JANE PADGHAM

THE intense pressure faced by manufacturers was vividly illustrated today by figures showing raw material costs soared in March at their fastest pace on record.

Boosted by spiralling oil, producers' input prices rose by 1.8% during the month to stand 11.4% higher than a year earlier - the highest annual rate since records began in 1986. Crude oil prices were a staggering 51.2% higher than March last year.

But fierce competition means manufacturers were unable to pass on these higher costs at the factory gates and their profit margins were squeezed further. Producers' output prices rose by 0.6% in March and were only 2.8% higher than a year earlier.

Simon Rubinsohn, an economist at brokers Gerrard, said: "Manufacturers' volume figures are flat on their back and hopes for a pickup in pricing power have failed to materialise.

"Going forward, the only hope is that raw material costs fall away but, with oil prices continuing to hover near record highs, that looks unlikely. …

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