What is the cost of living crisis?
The ‘cost of living crisis’ is a term being used to describe the current state of living. It means we’re all paying a lot more on our energy bills and everything in general, is becoming more expensive. From rent to fuel, food to clothing, it’s all going up.
As a result, many are making cutbacks on their spending in order to save money. Many are currently deciding whether to feed themselves or heat their home. The reality of the cost of living crisis is bleak and tragic, to say the least.
How are consumers being affected?
It’s safe to say that all consumers are being affected by the inflation rate. While that might be so, not everyone is impacted in the same way. Low-income consumers are the ones that are seemingly the most impacted by the cost of food and energy rising. The challenge that many have is that their wages haven’t risen in order to accommodate this.
As a result of the cost of living crisis, many have cut back but for some, no amount of cutting back is helping. Even with very little food on the table and switching their heating off, they’re still living beyond their means - and this isn’t a choice they’re making either.
Consumers are therefore relying on debt, which is only making things worse for the future.
How is the manufacturer affected?
With many industries affected, how are manufacturers affected by the cost of living crisis?
With the rise in energy costs, it’s making it more difficult to operate the usual working hours. Many are struggling to keep the lights on, let alone keep their equipment running.
Businesses, as a result, are needing to find more smart and cost-efficient ways of saving on their energy bills.
The price of fuel and transporting goods or services have seen considerable hikes in cost. Cash flows are therefore being stretched and businesses are finding themselves in a predicament.
With low cash flow and rising transport costs, there’s no other way for some businesses to continue doing business. It’s resulted in many having to outsource these services to save money.
Material costs have soared higher and higher over the last year, which has had a knock-on effect on what a lot of businesses charge their customers in order for them to just breakeven.
For example, over our busiest period between December 2021 and June 2022 one of our most commonly used machining materials, epoxy tooling board, increased in price by 45.5% in just 6 months. Prior to the cost of living crisis, we could expect to see tooling board prices increase by roughly 3 to 5% over a 12 month period.
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Established in 1985, we have built a strong reputation for manufacturing excellent products within tight timescales and to extremely high tolerances. In order to achieve this, we use state of the art equipment and traditional, time honoured processes and skills.