Economy

Business growth slows amid supply chain disruptions, BDO warns

The BDO Output Index fell by 5.02 points to 100.69 in September, the lowest level since March this year at the height of lockdown

Business output growth across the UK has slowed for the fifth consecutive month as supply chain disruption and staff shortages continue to affect the economic recovery, according to the latest Business Trends report from BDO.

The BDO Output Index fell by 5.02 points to 100.69 in September, the lowest level since March this year at the height of lockdown.

This decline, across both the manufacturing and services sectors, reflects the ongoing impact of supply chain disruption and staff shortages on businesses, potentially “de-railing” plans for recovery.

The group’s Consumer Inflation Index also jumped by 2.39 points in September to 102.70, representing a near ten-year high, driven by the increased price of energy and fuel.

A slowdown in BDO’s Employment Index growth also showed the difficulties that many businesses are having seeking employees.

Kaley Crossthwaite, partner at BDO, said: “While a gradual deceleration in the pace of growth is to be expected as economies normalise after the pandemic, it is clear that acute labour shortages and supply chain disruption are weighing heavily on productivity.

“Many businesses are caught between a rock and a hard place. Long-term planning for a post-pandemic and post-Brexit economy is crucial, but the significant challenges at their door make it increasingly difficult to focus beyond these short-term issues.”

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