A rapid post-lockdown market recovery is under way and businesses are starting to plan ahead with more confidence. Unfortunately, the current surge in demand for commodities is coinciding with significant material and component shortages, such as industrial-grade copper and microchips, as well as a lack of slots on transport vessels. This has been particularly hard-hitting for the electrical industry, which is now under major strain as it is caught between inflationary pressures, customer demand and the materials shortage.

Inevitably the shortages result in price increases, given not only the lack of materials, but also the logistical challenges. The rising pressure on the movement of goods means there are fewer vessels and container space available due to increased demand. In keeping with the impact of supply and demand, prices have to reflect the current surge in global demand for key raw materials and commodities across industries. The electrical industry therefore needs to be prepared for flexible solutions moving forward. Prices are unlikely to return to fixed rates across the board and electrical companies will need to communicate clearly with their customers, working closely together to ensure sufficient supply for their needs.

 

Why raw material shortages, unexpectedly rapid post-COVID market recovery & supply chain disruption are creating the perfect storm for the UK electrical industry