Transport firms least likely to raise prices in September

UK transport and storage businesses expect fewer price rises in September than any other major sector, with Office for National Statistics data showing 9.7% planned increases.

That is down from 15.8% in August and below the all-sector average of 14.1%, according to the latest Business Insights and Conditions survey.

The figures suggest a more cautious approach among logistics operators, hauliers, couriers and warehousing groups at a time when manufacturers and retailers are more willing to lift prices. Across transport and storage, 60.2% of firms said they were not considering a price rise in September, up from 40.6% a month earlier.

That compares with manufacturing, where 16.6% of businesses expect prices to rise in September. In wholesale and retail, the share is higher at 19.7%.

Sector split

The transport and storage reading is the sector's lowest since a sharp rise earlier this year. In May, 41.1% of transport firms expected to raise prices, but that level has since retreated.

Among transport and storage businesses considering higher prices, 24.3% cited transportation or haulage costs and 22.0% pointed to energy prices. Finance costs played a much smaller role than before, falling to 3.6% from 13.9% in August.

Manufacturers reported a different set of pressures. Raw material prices were the most common factor behind planned increases, cited by 36.8% of firms, followed by labour costs at 31.2%. Energy prices accounted for 23.3%, while transport costs were mentioned by 22.0%.

Although the proportion of manufacturers expecting to raise prices fell from 22.9% in August to 16.6% in September, fewer ruled out any increase. The share not considering a rise dropped from 42.8% to 37.2%, suggesting more firms are at least weighing the option.

Wholesale and retail businesses showed a broader spread of cost pressures. Energy prices were cited by 25.6% of those considering increases, transport or haulage costs by 24.3%, raw material prices by 23.9% and labour costs by 20.7%.

Cost pressures

The ONS figures suggest cost pressures are not moving uniformly across the economy. While logistics firms remain exposed to fuel, haulage and energy costs, they appear less inclined than other sectors to pass those costs on in the near term.

David Jinks, Head of Consumer Research at Parcelhero, said: "The 9.7% figure is the lowest reading the sector has posted since the mid-year spike in May, when 41.1% of transport firms expected rises, largely thought to reflect one-off cost pressures earlier in the year. Crucially, 60.2% of transport and storage firms are not considering raising prices at all in September, a sharp jump from 40.6% the previous month.

"Where transport firms are contemplating price rises, the two leading factors are transportation or haulage costs at 24.3% and energy prices at 22.0%. Notably, the influence of finance costs on the sector's pricing has collapsed, falling from 13.9% of businesses in August to just 3.6% in September, suggesting the financing pressures that shaped earlier decisions have eased considerably.

"That is a markedly different picture from the manufacturing and wholesale and retail sectors, where more businesses are actively weighing up price increases and for entirely different reasons.

"In manufacturing, 16.6% of businesses expect prices to rise in September. That is down from 22.9% in August, but the proportion not considering any price rise also fell, from 42.8% to 37.2%, meaning more manufacturers are weighing up an increase than the month before. Where they are, raw material prices at 36.8% and labour costs at 31.2% are by far the dominant drivers, well ahead of energy prices at 23.3% and transport costs at 22.0%.

"In wholesale and retail, 19.7% of businesses expect prices to rise in September, a slight increase from 18.7% in August. Energy prices at 25.6% and transport or haulage costs at 24.3% are the leading factors behind any rises, followed by raw material prices at 23.9% and labour costs at 20.7%, showing a broader spread of pressures than in either transport or manufacturing."

The survey data also show an overall picture that remains mixed rather than uniformly inflationary. In some sectors, headline expectations are easing, but the share of firms considering increases and the reasons behind them still vary sharply.

For transport and storage, the reluctance to raise prices may matter for businesses that rely on delivery, freight and warehousing services ahead of a busy trading period. Stable logistics pricing can influence costs across supply chains, even as manufacturers and retailers continue to face pressure from materials, wages and energy.

Jinks added: "What is striking about this month's figures is that transport and storage, the sector that ultimately absorbs and passes on the country's haulage and fuel costs, is showing the least appetite to raise its own prices. Just under one in ten transport and logistics firms expect to put prices up in September, and six in ten are not even considering it. That is a real change of tone from earlier in the year, when energy and financing costs were squeezing margins hard.

"It is also notable that when transport firms do think about raising prices, haulage costs and energy remain the biggest drivers. It is their own cost base biting, not the broader inflationary pressures manufacturers are facing from raw materials and wages, or retailers from energy and transport combined.

"Manufacturing tells the opposite story. Even though headline price expectations have eased, more manufacturers are actively weighing up increases than last month, driven by the relentless climb in raw material and labour costs. Retailers and wholesalers sit somewhere in between, juggling energy, transport and staffing costs all at once."