The Food and Drink Federation publishes Q3 Business Confidence Report
09 December 2021
Today, the FDF has published their Q3 2021 Business Confidence Report, summarising member sentiment, the latest official industry figures, and key opportunities and challenges for the sector.
Net business confidence fell by 55% in Q3 2021, dropping to -51% as a result of the ongoing labour shortages and associated issues that are impacting food and drink supply chains. This is the lowest net confidence rate since the height of the pandemic in Q2 2020 (-65.2%) and the biggest drop in confidence since the FDF first began reporting in 2018.
Key findings from the report include:
- Severe supply chain disruption was the biggest cause for concern, particularly the transportation of goods with 93% experiencing delayed or missed outbound deliveries and 75% reporting delayed or missed inbound deliveries.
- Labour supply issues are not likely to resolve soon, half of respondents are expecting the permanent supply to decrease and 54% expect the temporary supply to decrease in Q4 2021. Labour shortages also continue to remain across a range of roles in the food supply chain. The most common shortages were HGV drivers, temporary agency workers and process, plant and machine operatives.
- Product margins are squeezed, driven by wide-ranging supply chain disruption and rising production costs.
- An overwhelming majority of businesses anticipate continued price rises, with 97% of respondents expecting consumer price inflation to increase in Q4 2021.
- Businesses are full of pessimism and a further decline in business confidence is anticipated. Around half of respondents expect a further decrease in business confidence in the final quarter of 2021.
Accompanying the report, please also find below a quote from Ian Wright CBE, Chief Executive at the FDF, regarding his views on these statistics:
“These results - compiled before the Prime Minister’s disappointing announcement yesterday - demonstrate that confidence levels across our sector have been hit by continuing supply chain disruption. On top of this, the confection of increasing uncertainty about Omicron, the UK’s changing trading relationships, and the re-ignition of inflation, all threaten to undermine resilience across the sector. Many businesses now expect disruption and reduced service levels to continue right through 2022 and into 2023.”
For media enquiries contact: Meg Bevan, Corporate Affairs Executive, on 07946 340 998, Megan.Bevan@fdf.org.uk