Supply chain woes hit UK firms

McDonald’s is the latest restaurant chain to be hit by UK supply issues as they announced a shortage of milkshakes. 

It follows the decision by fast-food chain Nando’s to temporarily close more than 40 outlets in Britain after staff shortages hit its chicken supply chain.

Retailers, restaurants, cafes and bars have struggled to recruit staff since the economy emerged from COVID lockdowns earlier this year, after workers left the sector and in some cases, the country, following Brexit.

Issues around staff shortages and supply chain disruption are also impacting UK manufacturing. 

According to IHS Markit and CIPS’ latest PMI flash data both the manufacturing and service sectors are reporting constraints on business activity due to staff shortages and supply chain issues.

Efforts to rebuild capacity and strong optimism towards the business outlook contributed to the fastest rise in employment numbers since the index began in January 1998.

However, backlogs of work increased for the sixth month in a row, as businesses struggled to keep up with customer demand. 

“An abnormally large slowdown in overall activity in August offers a stark warning to the UK economy that the accelerated levels of growth we’ve seen earlier this summer are not sustainable,” said Duncan Brock, group director at CIPS. 

“It was the slowest output expansion for six months, and the worst shortages of staff and materials on record are mostly to blame.”