Agents’ summary of business conditions – 2021 Q2
Manufacturing output increased to close to pre-Covid levels, though supply bottlenecks constrained production in several sectors.
Output among food and beverage producers increased as the hospitality sector stocked up ahead of reopening. Strong demand for construction materials pushed mining and quarrying output above year-ago levels, and contacts in the oil and gas sector said that production was close to pre-pandemic levels.
There were widespread concerns among contacts about the cost and availability of materials and components. Output in the automotive sector continued to be constrained by the shortage of semiconductors. And contacts in some sectors reported stockpiling of materials and components in anticipation of continued supply-chain disruption. There were many reports of lead times increasing.
Contacts reported that Brexit-related issues that had previously impacted on exports – such as customs declarations, rules of origin and product-labelling – were starting to abate as businesses adapted to the new requirements. Demand from the EU for UK goods was reported to have returned. More businesses said they were setting up hubs in the EU in order to continue selling to customers in the region. There was limited evidence of substitution away from EU imports.
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