Annual private sector output price inflation in the DMP was 6.2% in the three months to April, 0.4 percentage points higher than in the three months to March. The single month figure for April was 6.8%, 0.1 percentage points lower than in March. Expected year-ahead annual output price inflation also rose, to 5.7% in the three months to April, up from 5.0% last month (the single month data was 6.2%, up by 0.2 percentage points).
Respondents estimated that the war in Ukraine would lower the sales of UK businesses by around 3% over the next year, a similar estimate to last month. 36% of businesses viewed the conflict as a top-three source of uncertainty for their business, down from 48% in March. In comparison, 29% of respondents cited Covid as a top-three source of uncertainty in April (down 1 percentage point on March), and 24% did so for Brexit (up 2 percentage points on March).
Overall levels of business uncertainty were broadly unchanged in April. 49% of respondents reported that uncertainty for their business was ‘high’ or ‘very high’ at the moment. That is well below levels seen at the height of the Covid pandemic. However, uncertainty around expectations for year ahead price inflation is at a historically high level.
The percentage of non-labour inputs being disrupted was little changed, at 14%, in April. The proportion of firms suffering some form of disruption to their non-labour inputs also remained stable at around two-thirds.
Recruitment difficulties remain widespread. In April, 87% of firms reported they were finding it harder to recruit new employees compared to normal. 58% reported that it was much harder, up from 53% in March but within the range of recent months.
In the April survey, businesses estimated that their sales in 2022 Q2 would be 3% lower than they otherwise would have been because of Covid-19. That is smaller than their estimate for 2022 Q1 of -4%. The impact of Covid on sales is expected to diminish further to -1% in 2022 Q3. The effects of Covid-19 on employment and investment are also expected to be relatively modest in Q2 and Q3, on average.
The DMP receives funding from the Economic and Social Research Council.