Data reveals high cost of Iran conflict on Midlands firms

Scott Knowles (Credit: East Midlands Chamber)

8 out of 10 Midlands businesses have experienced increased costs as a result of the Iran war, according to a survey from four chambers of commerce in the region. Manufacturers have been particularly exposed to rising energy, transport, insurance and raw material costs.

East Midlands Chamber, Greater Birmingham Chambers of Commerce, Coventry & Warwickshire Chamber of Commerce and Black Country Chamber of Commerce surveyed 698 businesses.

The four chambers of commerce are calling on Government to recognise the regional impact of continuing geopolitical disruption and provide businesses with greater certainty over energy, trade and supply chain policy.

Summary of findings from the survey:

• 8 of 10 respondents (80%) experienced an increase in business costs due to the Iran conflict and associated disruption to international trade routes
• Almost all manufacturers surveyed (95%) reported higher costs, compared to 75% of service-sector businesses
• 12% of exporters, of the 187 that responded, reported paused activity or having withdrawn from specific overseas markets
• More than a quarter of respondents (26%) said the situation had influenced investment or capital spending
• Half of firms (50%) identified energy cost support or improved stability as the leading priority to help manage continued geopolitical disruption
• Clearer government contingency planning was the second most common request, identified by 47% of manufacturers and 36% of service businesses

East Midlands Chamber Chief Executive Scott Knowles said: “High costs and uncertainty are two things that challenge business growth, affect confidence and ultimately investment, yet both jump out of the page as red flags in these survey findings – that should be a concern to policymakers.

“The results of this research lay bare the extent of damage this long running conflict, and others, has had on firms – holding back investment, holding back growth.

“For 8 out of 10 firms surveyed to have reported higher costs as a result of the Middle East conflict – at a time when we know the cost of doing business was already sky high – should concern policymakers.

“For investment intention to have stalled for many firms; for price pressure to have increased – these should be concerns for policymakers too and prompt action.

“The case for support is clear – the respondents in this survey are calling for greater help with energy costs and better contingency planning. I would urge policymakers to prioritise delivering in the areas firms have highlighted so growth is not hindered.”