The boss of a Dundee firm is warning of challenging times ahead for businesses due to rising costs, and difficulties recruiting.
Dale Harris, chief executive of ATL Turbine Services, said the turbine repair business has recently seen its electricity bill rise 30%, to about £40,000 per month.
He said metal prices have sharply increased – up as much as 50% – and raw materials are increasingly hard to come by.
“Fuel costs are driving high single-digit to some double-digit price rises from suppliers,” he added.
“Government costs are not helping at a time where businesses are struggling.
“The rise in National Insurance impacts employees and the business, especially so over the next three months.”
ATL boss critical of ‘ridiculous’ parking levy
He slammed the workplace parking levy as “the most ridiculous piece of legislation”.
Dundee City Council leader John Alexander has previously welcomed the legislation but ruled out using it in Dundee.
But the ATL Turbine Services boss said: “While I understand and appreciate the intent of the levy, it could easily have the opposite effect of its intended purpose.”
He said the business could be required to make an extra £250,000 in sales to cover the cost of the levy, rather than putting it on to employees.
“Only so much can be passed back to customers in the form of price rises,” he said.
Mr Harris added that people are feeling a “severe pinch”.
“Finding the right, skilled labour is difficult.
“Inflation is a major concern and will affect access to labour. That could create a jobs merry-go-round, further driving wage bills.
“Uplift in economy is not being felt and costs are putting profits under severe pressure.
“We have pre-pandemic output levels but not pre-pandemic costs.”
Dealing with challenges of Brexit and Covid
Mr Harris said Brexit and Covid have also brought up their own challenges for all businesses.
He said ATL now find getting spare machine parts from Europe takes much longer and is much more costly.
The chief executive said it’s now easier to send goods to the USA than into Europe.
He added: “Importing and exporting has become more difficult, more costly and takes far longer than before.
“Covid has not helped.
“ATL has employed two additional part-time people to deal with administration and customs paperwork.
“The biggest impact is in small, independent customers who have never had to export anything before.
“They have no infrastructure to do it and are faced with a myriad of paperwork they have no way of completing properly.”
Issues bring opportunities, ATL boss says
Despite the challenges, the ATL boss believes there are opportunities for businesses.
He welcomed the end of Covid restrictions, with the wearing of face masks no longer law.
He said firms now need to work through the issues of exporting to Europe.
Mr Harris said: “Whenever there are problems, there are opportunities for those who can solve them and add value.
“If we consider work from the customer perspective, we can come up with ways to make their lives easier.
“That is something people will pay for.”
Survey of Dundee and Angus firms
Mr Harris was speaking at a State of the Economy event held by Dundee and Angus Chamber of Commerce.
The quarterly survey of chamber members shows:
- Supply chain issues and rising costs have threatened profitability
and cash flow - Local firms expecting significant price increases due to rising inflation
- Respondents from the arts, education, hospitality and manufacturing are
significantly more optimistic than they were 12 months ago - Orders and investment have reached record highs
- Employment figures rose in several sectors
