Suppliers who buy in US dollars worst hit, says expert

Suppliers who purchase from the Far East in US dollars are taking the brunt of the weak pound and “the pattern appears to be set”, a market analyst has claimed.

Bathroom manufacturer Crosswater was the latest to announce a decision to introduce a 10% price increase later this month, which “reflects decisions taken by other companies with similar business models to apply immediate increases,” the analyst said.

However, European manufacturers with British subsidiaries appear to be holding back on introducing price increases, for now.

“This may be because the pound is more stable against the euro than it is against the dollar,” the analyst continued. “Or that such companies take a global approach to currency fluctuations as they are part of pan-continental organisations with their own manufacturing base.”

He warned that the contracts sector could be the next to be hit in a wave of price increases.

“Projects are usually priced over extended periods and developers are very resistant to surprise surcharges,” he explained. “Will existing sites be forced to pay more? Will future sites be repriced? Will such increases see the Chinese importers relinquish market share to the longer-established European manufacturers? Whatever the case, such volatility and instability is not a good thing and will have a ripple effect throughout the sector.”

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