Australian firms plan price rises amid supply strain

BSI research found that a third of Australian businesses plan to raise prices over the next six months. The survey suggests consumers could also face fewer product choices and more delays.

The findings point to ongoing strain across supply chains as companies respond to conflict, extreme weather, freight disruption, and shortages of raw materials and components. BSI surveyed 1,600 procurement, supply chain, risk, and operations professionals across Australia, the UK, the US, Germany, France, Italy, and Canada, including respondents in retail and consumer goods, food and beverage, agriculture, and pharmaceuticals.

In Australia, 33% of businesses said they planned to increase prices to offset disruption-related costs, compared with a global average of 36%.

Other measures point to a broader impact on shoppers and patients. More than a quarter of Australian companies, 28%, said they planned to reduce the range of products or stock keeping units they offer over the next six months. Meanwhile, 30% said they were already pausing new orders, and a further 32% expected to do so within a year.

Warnings to customers also appear likely to become more common. The research found that 85% of Australian organisations were already warning customers about shortages, delays, or dependency risks, or expected to do so within the next year.

Disruption pressures

The data shows many businesses have already been hit by external shocks. In the past 12 months, 44% of Australian organisations said they had experienced disruption linked to climate and extreme weather, 39% reported disruption tied to geopolitical events, and 29% cited shortages of raw materials or components. Another 40% said they had faced cyber or technology-related disruption.

Preparedness levels were lower than the scale of those risks. Four in 10 Australian businesses said they were fully prepared for raw material or component shortages over the previous six months, despite a run of global and domestic events affecting trade and transport.

Companies are now adjusting sourcing and logistics models rather than relying only on short-term responses. The research found that 82% were already stockpiling or building strategic inventory buffers, while 79% were nearshoring their supply chain or considering it within 12 months. Of those, 36% were already nearshoring and 42% were planning to do so.

Transport networks are also under review. Some 84% of respondents said they were already changing how products are transported or planned to do so within the next year, reflecting disruption on shipping routes and concerns over freight theft.

Operational changes

Australian businesses are also preparing more immediate steps. Close to a third, 32%, said they expected to find new suppliers in the next six months, while 20% expected to shift trade routes in that period.

Supply chain strain is also feeding into labour decisions. One in four respondents said they expected to cut jobs or reduce recruitment because of supply chain pressures.

Despite those pressures, most respondents said they expected to improve their readiness. The survey found that 87% of Australian business leaders were confident their organisation would be better prepared for supply chain disruption within 12 months.

That confidence is tied in part to technology spending. BSI found that 83% of Australian businesses were deploying AI predictive analytics for supply chain monitoring, and 81% were integrating real-time data across systems.

The breadth of the survey suggests the issue extends beyond logistics teams. Censuswide, which carried out the research, included managers and senior staff in ESG, logistics, procurement, and supply chain roles, alongside finance, legal, and operations staff with responsibilities linked to supply chain management, risk management, or planning.

Tony Pelli, Practise Director of Supply Chain Resilience at BSI, described the broader picture facing businesses.

"The era of smooth, predictable global trade that defined the last three decades is behind us. Today's supply chains operate in a world shaped by geopolitical competition, climate disruption and increasing uncertainty," Pelli said.

He said the effects were likely to be felt well beyond company operations.

"Businesses are facing a new normal of near-constant disruption, and we are likely to see no let-up in the coming months and years. As our research shows, this is not just a concern for those managing operations; we expect it to directly affect consumers in the coming months. Whether it is empty shelves, higher prices or delays to receiving orders, the impacts are likely to trickle down to the public as businesses battle one disruption after another. For business leaders, building resilience requires stronger collaboration, improved visibility across supply chains and more proactive approaches to managing risk," Pelli said.