Business costs rise well above inflation

Business Comments Off on Business costs rise well above inflation

The cost of doing business in the UK has increased well ahead of the rate of inflation in 2013, according to new research from business group the Forum of Private Business (FPB).

The FPB’s latest Cost of Doing Business member survey found that prices for micro, small and medium-sized employers have increased by six per cent this year. The UK’s inflation rate currently stands at 2.2 per cent.

Some 94 per cent of respondents said their overall business costs have increased this year. The most commonly-cited reasons for this were increases in the cost of:

• energy

• transport

• marketing

• raw materials and stock.

Other headline findings from the Cost of Doing Business survey include:

• 26 per cent of respondents have less leeway in coping with business costs than last year

• 81 per cent said rising business costs have been detrimental to their business

• 73 per cent have had cash flow issues as a result

• 51 per cent said this has been detrimental to employment levels

• 63 per cent feel that it has restricted their plans for growth.

Late-paying customers had compounded these problems for 59 per cent of businesses and 35 per cent said that red tape and administrative burdens had taken valuable time away from the running of the business.

The FPB’s head of policy, Alex Jackman, said:

“As well as positive action on late payment we’d like to see further steps to help small firms with business overheads. We’d like a freeze on business rates and small business multipliers next year. An extension of small business rates multipliers until the end of the current parliament would also be welcome and we’d like to see the government commit to undertaking independent research into business rates.”