Against the backdrop of ongoing volatility, we today received the latest update from the CLC Product Availability Committee. From an availability perspective the overall tone is positive. The specific challenges in Northern Ireland aside and despite ongoing reports of chaos at the Ports, the decision to delay the latest round of post-Brexit customs checks means that general product availability continues to improve across virtually all categories.
The Statement also identifies that inflation associated primarily with the ongoing conflict in Ukraine appears to have stabilised, with softening demand, particularly in the retail end of the market contributing. The underlying conditions remain concerning, however, with many UK manufacturers purchase energy on forward contracts to help manage risk. The current extreme price volatility means that some firms are experiencing electricity cost fluctuating by up to 300% on a day-to-day basis, which may affect the financial viability of some energy-intensive manufacturing particularly during the winter months.
One area for FIS Members to be wary is glass. There are fresh concerns over the availability and cost of imported glass later in the year, with European plants anticipating reduced production stemming from uneconomic energy costs.