Supply chains beyond energy markets will come under increasing pressure as the impact of the war in Ukraine spreads further, a meeting of politicians and business leaders heard on Wednesday.
Food and construction were sectors flagged as facing issues at the meeting, which also heard labour shortages in some countries are expected due to Ukrainian truck drivers returning home to fight in the war. In certain countries, the meeting was told, as many as 30 per cent of the heavy goods vehicle driving workforce is Ukrainian.
Tánaiste Leo Varadkar convened the Enterprise Forum, a group of civil servants and business organisations, held in light of the war in Ukraine.
Participants said afterwards that inputs for staples like bread and raw materials for construction are coming under pressure and that this was flagged at the meeting. One participant told the meeting that some outfits were facing increases of up to 50 per cent in the cost of structural steel.
Participants also raised concerns about the impact of the crisis on consumer confidence – with incomes at the lower end of the distribution squeezed and better-off households postponing discretionary spending.
Mr Varadkar indicated measures would be considered in October’s budget to deal with the fallout from the crisis, and asked for ideas from the private sector on what form they might take.
It is thought that both taxation cuts and spending increases would be on the table come budget time.
Ministers have been told that high wholesale energy prices are expected to remain until 2023, driving household bills high next winter.
In a private warning for ministers delivered at cabinet on Tuesday, they were told that hedging arrangements - where a company buys fuel on the market for a locked-in price - had limited price hikes so far.
Government sources said that while the average Irish utility bill has risen by between 25 and 30 per cent, hedging has prevented further price hikes. However, these contracts are beginning to expire.
Ongoing turmoil
The ongoing turmoil in energy markets was raised by business representatives at Wednesday's forum, which was attended remotely by the Tánaiste and also Minister of State Robert Troy, who dialled in from Mumbai.
Some firms also indicated they wanted to get more involved in the humanitarian response by offering jobs to arrivals from Ukraine, with officials indicating the Government would try to facilitate this.
There were also concerns about medicine shortages in Ukraine and more broadly in eastern Europe.
The Tánaiste indicated the Government is seeking advice from countries that have handled a large influx of refugees in a short space of time amid rapid growth in the number of Ukrainians seeking protection in Ireland.
During a meeting with business organisations today, he said that Ireland has been in touch with countries such as Germany and Sweden, who took in significant numbers of refugees during previous migrant crises.
He has also raised it with the Colombian government, where he is as part of a ministerial St Patrick’s Day delegation, as the country has recently dealt with an influx of refugees from Venezuela.
Another meeting of the forum is set to be convened in the coming weeks.
