More than half (55%) of British exporters have felt an impact from disruption in the Red Sea, a survey has shown.
The survey, carried out by the British Chambers of Commerce (BCC), showed that 53% of manufacturers also reported disruption due to attacks by Iran-aligned Houthi rebels.
Across all businesses, 37% reported an impact due to the disruption.
Disruption
“There has been spare capacity in the shipping freight industry to respond to the difficulties, which has bought us some time,” said the BCC’s head of trade policy, William Bain.
The issues faced by businesses varied. Some reported container costs quadrupling, while others reported cashflow difficulties and shortages of parts.
The Bank of England has called the Red Sea disruption one of the main upside risks to inflation this year.
However, the attacks and broader conflict in the Middle East have so far had less economic impact in Britain than originally feared.
A survey by Moody’s Investor Services said last week that despite the attacks raising shipping costs, so far they have not impacted inflation.
Houthi Attacks
Houthi militants have launched drone and missile attacks on the Red Sea, Bab-al-Mandab Strait and Gulf of Aden since November.
The group is carrying out the attacks in support of Palestinians as the Israel-Hamas war continues.
Last week, the Houthis said they would step up attacks on shipping with links to Israel, the US, and the UK.
The BCC conducted the survey between 15 January and 9 February. They surveyed 1,087 firms, 90% of which had under 250 employees.
On Thursday, the S&P Purchasing Managers’ Index showed that British businesses’ costs rose at the fastest rate in six months in February.
While higher freight costs related to the Red Sea played a part, manufacturers cited rising wage bills as the biggest factor.
Read More: Europe Gains Powers To Tackle Supply Chain Emergencies
