Most of Sri Lanka’s exporters are grappled with high costs in sourcing export inputs with some exporters are struggling to source export inputs while facing shortages, according to a recent survey.
Most exporters cited Obtaining production/service input was highlighted as a key challenge due to price increases and the shortage of production/service input from domestic and international sources in the Export Barometer Survey, a bi-annual survey designed and conducted by the Ceylon Chamber of Commerce (CCC) and the United States Agency for International Development (USAID)’s Partnership for Accelerating Results in Trade, National Expenditure and Revenue (PARTNER) project.
51% of survey participants said that they faced rising costs of production/service inputs and 37% of participants faced shortages in securing necessary production/service inputs for exports.
In terms of transport and logistics challenges, both freight and container shipping costs have risen for exporters. The key drivers for this increase have been a rise in freight/air rates, shortage of vessels/flights, and delays in vessel/airline schedules.
84% of export firms experienced an increase in freight cost and 87% of export firms experienced an increase in container shipping costs. Further, 28% of exporters were struggling to ship their goods due to a shortage of vessels/flights for export goods. Exporters also faced challenges in shipping their goods due to delays in vessel/airline schedules and Delays in clearance of goods from the ports.
The exporters were concerned about the overall business environment in the country. The survey revealed that most firms were expecting the economy to contract in the next 6 months compared to the last 6 months, however, they were more optimistic in their outlook for export growth. 21% of the respondents were uncertain of the outlook for the economy. More SMEs expect moderate export growth compared to large firms that are expecting high growth.
The Export Barometer Survey is a bi-annual survey conducted to provide exporter insights over time. The most recent iteration provides key insights into the impact of COVID-19 on exports and the economy’s transition to the ‘new normal’ as well as longer-term competitiveness.
Small and medium enterprises (SMEs) comprised the majority of the 120 respondents, and many hailed from the Western Province. One quarter of the responding firms was women-owned and/or led. More than three-fourths of the respondents were engaged in goods exports, with the remaining quarter focused on services.