IN Brief:
- 28% of larger UK businesses are concerned international conflict will affect supply chains over the next year.
- Shipping disruption concerns stand at 21%, 12 percentage points above September 2025.
- Among businesses concerned about supply chain factors, 53% expect material sourcing costs and 46% transportation costs to increase.
Concern about conflict and shipping disruption remains substantially higher among UK businesses than it was a year ago, with the latest official survey showing more than a quarter of larger companies worried about international conflict affecting supply chains during the next 12 months. The Office for National Statistics recorded similarly elevated expectations for sourcing and transportation costs among businesses already concerned about supply chain risks.
In August, 28% of businesses with 10 or more employees reported concern about international conflict affecting supply chains over the coming year, while 21% cited shipping disruption. Both figures were broadly stable compared with July, but international-conflict concern was 17 percentage points higher than in September 2025 and shipping disruption was 12 points higher.
The year-on-year comparison is more significant than the relatively quiet monthly movement because it shows a higher level of external risk becoming embedded in business expectations. Procurement and logistics teams may see little change from one survey wave to the next while still operating against a materially different baseline from the one they faced 12 months earlier.
Cost expectations have risen alongside those concerns. Among businesses with 10 or more employees that reported concern about supply chain factors, 53% expected the cost of sourcing materials to increase and 46% expected transportation costs to rise. Those proportions were broadly stable from July but were five and 12 percentage points higher respectively than in September 2025.
International conflict can affect procurement without a business buying directly from an affected country. Supplier availability, commodity markets, insurance, vessel routing, transit times, financing, and inventory requirements can all shift as disruptions move through international networks. Shipping problems can amplify the effect when diversions reduce effective vessel capacity or create congestion at alternative gateways.
Energy and fuel remain another part of the cost picture. The ONS found 59% of businesses expressing some degree of concern about energy prices in late August, while 63% reported concern about increases in fuel prices. Both measures were broadly stable compared with early August.
Those inputs carry particular weight in logistics because transport exposure extends beyond the rate charged on a freight invoice. Fuel affects road haulage directly and influences parts of maritime and aviation operating costs, while energy prices feed into warehouses, cold stores, production sites, ports, and suppliers elsewhere in the chain.
The survey does not establish that the disruptions businesses fear will occur. BICS records reported expectations and sentiment, and the ONS classifies the results as official statistics in development, advising caution because the estimates remain subject to sampling and non-sampling uncertainty.
Wave 163 was live between 17 and 30 August and drew 9,899 responses from a sample of 38,600 businesses, giving a response rate of 25.6%. The survey is voluntary and covers a broad range of private-sector activities, while sectors including agriculture, energy generation and supply, public administration and defence, public education and health, and finance and insurance are excluded from its sampling frame.
Those qualifications do not remove the operational value of the year-on-year movement. Higher expectations for sourcing and transportation costs affect the assumptions used in budgets, supplier negotiations, contract terms, safety-stock decisions, and network design. A business that treats disruption as a recurring possibility may make different inventory and sourcing choices from one that assumes transport and supply conditions will quickly revert to previous norms.
Inventory provides one example. Holding additional stock can protect production or service levels against longer lead times, but it consumes working capital and warehouse capacity. Sourcing from additional suppliers can reduce dependency on one country or vendor, although qualification, tooling, minimum order quantities, compliance, and fragmented purchasing volumes can make diversification more expensive.
Freight contingency carries similar trade-offs. Alternative routes or transport modes may protect a production schedule but can increase direct spend, handling, inventory in transit, or administrative work. If 46% of businesses already concerned about supply chain factors expect transport costs to rise, resilience options have to be evaluated alongside their financial impact rather than treated as cost-free insurance.
Climate change has also moved higher in the survey. In August, 13% of businesses with 10 or more employees reported concern about climate change affecting supply chains during the coming year, up from 9% in July and 4% in September 2025. The increase adds another source of route, infrastructure, and supplier uncertainty to an already broader risk picture.
The ONS will publish the next BICS bulletin on 24 September. The useful indicator will be whether concern over international conflict, shipping disruption, and associated costs begins to fall materially or remains near current levels. If the elevated readings persist, the operating assumption for many companies will increasingly be that disruption is part of normal supply chain planning rather than an occasional exception.
