Middle East conflict: BALI members discuss the impacts on landscaping
While our first thought is with everyone caught up in the war, BALI has also been thinking about the secondary impacts on the global economy and, in turn, our own sector, informed by some initial feedback from members.
Of course, with the Strait of Hormuz – a globally important shipping lane – effectively closed since the early days of the conflict, the transport of fuel and other goods around the world has been severely affected.
One member told us about the uncertainty now inherent in shipping:
‘[Fuel and shipping costs] are unknown until shipments actually arrive in the UK… Increased shipping times and cost of shipping can increase while goods are actually in the water.’
This disruption has restricted the global supply of oil and gas and therefore pushed up prices of these commodities as well as closely related products such as fertiliser – both of which matter to our sector.
Landscaping impacts
Be it diesel for driving to site, petrol for lawn mowers, or electricity for power tools, fossil fuels and the electricity generated from them are still widely used in landscaping, meaning costs are likely to increase across the sector.
As one member told us,
‘Fuel costs are a huge concern as this is the biggest expense and one of the main drivers of our business.’.
Moreover, oil and gas are used to produce all sorts of products supplied into landscaping and the costs of these may increase too, with heat- and fertiliser-dependant plants facing particular challenges.
Another member said they are already under pressure from the supply chain:
‘We are seeing daily letters from suppliers looking to increase rates and include surcharges.’
With the general public also facing cost increases – notwithstanding the short-term protection of the price cap – landscapers may struggle to get business on existing prices, let alone pass the war-related cost increases on to the end consumer.
And, as the conflict drives up inflation across the board, employers may in turn come under pressure to increase wages, compounding the effects of recent national insurance and minimum wage increases on the labour bill.
Members have expressed a range of other concerns about the potential impacts of the war, such as:
- Fuel rationing for landscaping
- Managing uncertainty in tenders
- Strained relationships with clients/suppliers
In terms of reacting to such impacts, we understand members are at various stages of action, from not knowing where to start and keeping a watching brief to advanced discussions among senior management and firm plans for measures like reducing imported stock and introducing surcharges.
BALI support
At the time of writing, the prospects for the Middle East conflict and the Strait of Hormuz are uncertain, but many of the impacts on our sector are already ‘baked in’ and will have significant consequences either way.
BALI appreciates the outlook will be very concerning for many members, and while our ability to influence the situation is limited, we will look at what more we can do to support members as the leading trade association for landscaping.
Meanwhile, the BALI policy team will continue to monitor developments and communicating them to members, while working alone and with industry partners to call for government intervention where appropriate.
We know members are interested in certainty and action from the government as well as fiscal changes on business rates, fuel duty, and capital investment and the further relaxation of planning laws.
Members can contact the policy team on +44(0)24 7669 0333 or technical@bali.org.uk to discuss the situation, while our professional advice service, Quest, is available free-of-charge on +44(0)116 243 7881 to assist on HR, legal, H&S, and tax issues.