2016 was a year of political turmoil and change. For UK manufacturers and Sterling, the effects were significant.
Between 2012 and 2015 Sterling was relatively stable trading between $1.45 and $1.7 to the pound with gradual changes. At the start of 2016 the Pound was worth $1.47; by the end $1.22- a drop overall of 18%. From the peak of the pound in the false trading of Brexit voting, when for a few hours Remain seemed to have won, the pound fell back to normal levels and then to $1.30. In October it fell again.
Initial reaction to the UK manufacturing industry was widely positive. The initial 8% fall meant UK products looked increasingly appealing as cheaper products for overseas buyers. The result was the UK manufacturing market grew post-brexit on a weak pound.
However on the downside for UK manufacturers is the cost of imports. With the second fall in Sterling’s these raw materials costs increased significantly. Raw materials are now costing significantly more to purchase from overseas markets such as China or those denominated in US dollars. Reports suggest that the UK has reported the steepest increase in raw materials cost for 25 years.
It is now common for UK companies to justify price increases on cost increase. Research by Markit shows that 90% of companies expressing reasons for a price rise referenced the Exchange rate as a factor. The most notable was in October that Unilever and Tesco had their well-publicised fight over costs and product availability for the consumer market.
In the same way the raw materials for polyurethane which is a derivative of oil have seen sizeable increases as the cost of oil has increased. For these reasons we have recently seen a small increase to some of our product pricing for street furniture.
Watts Protecting Street Furniture Budgets
“Watts still strongly believe that we are offering market-leading prices on our wide range of polyurethane bollards, cycle racks and post and rail” says Andrew Forrester, manager for Street Furniture. “Often despite our price increases, our products are better value than our rivals for similar quantities. This is in line with our divisional aim and logo of Protecting People & Budgets”
For any street furniture requirements, please call Andrew Forrester on 01594 847150