Consumers 'must face up to the reality of price rises'
The public has to be prepared to pay more for goods as manufacturers struggle with soaring input costs, it has been claimed. Stephen Kelly, the head of lobby group Manufacturing NI, said firms here faced an increase of around 50% in their input costs as a result of the falling value of the pound.
And he said firms had so far been reluctant to pass on their rising costs to customers in the form of increased prices.
"Our manufacturers are conceding profit and trying to find other efficiencies, but really we need the consumer to start picking up costs."
Mr Kelly spoke as a CBI survey said factories UK-wide would soon hike their prices as their costs soared following Brexit and the collapse in the value of the pound.
The CBI said that UK order books were in a healthy state.
However, Mr Kelly said Northern Ireland firms were not enjoying a similar bonanza.
"We are so dependent on being competitive inside Great Britain - but our input costs have risen so much that our competitiveness in Great Britain has been affected."
The main increases were being felt in raw materials, and particularly energy, as fuel and oil were being purchased in dollars, Mr Kelly said.
The CBI survey showed food and drink are expected to bear the brunt of the price rises, adding to fears over surging UK inflation.
Rain Newton-Smith, chief economist at the CBI, said: "It's good to see manufacturers' overall order books at healthy levels, and the outlook for output growth remaining robust as we head into Christmas.
"But the weak pound is beginning to make its mark, and prices are expected to rise, especially in the food and drink sector.
"On the flip side, though, export orders remain above average."
Howard Archer, economist at IHS Global Insight, said expectations for price rises were "particularly bad news for consumers".
"This reinforces belief that consumer price inflation is headed markedly higher over the coming months," he added
The Ulster Bank purchasing managers index (PMI) for October said export orders had gone up during the month, but input costs had also risen "substantially".
This week Manufacturing NI also warned that manufacturing firms in mid-Ulster were losing "millions of pounds" due to the poor condition of roads.
It warned that delays on the A6 between Randalstown and Castledawson were holding up the movement of people and goods.