Small businesses suffer inflation rise
Record price increases hit small businesses the hardest
Small businesses in the UK suffered the biggest quarterly rise in costs since data was first recorded in 2005, according to the Business Inflation Guide (BIG).
The latest statistics, produced by More Th>n Business, saw a sharp increase in inflation of 2.7% between January and March 2010, compounding what were a miserable final three quarters of 2009 for small businesses.
Commenting on the figures, Mike Bowman, head of More Th>n Business, said they were not good news for small business owners.
He said: “They’ve already seen revised forecasts for slower economic growth than originally predicted and these cost increases will undoubtedly test cash reserves for small businesses even further.”
According to the BIG, vehicle maintenance costs and tax have experienced the largest price rises of 7.5%, while fuel costs are 6% higher and office equipment and furniture are almost 6% higher.
The guide also highlighted manufacturing companies as the worst affected by the price hikes, with costs increasing by nearly 3% between January and March, and 7.6% over the past year.
Stephen Roper, professor of enterprise at the Centre for Small and Medium Sized Enterprises at Warwick Business School, said: “Economic recovery looks set to take longer than expected and small businesses are still facing a challenge in getting financial support from banks. Subsequently, they are being forced to push up prices for their customers in order to absorb rising costs.”
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Self-employed electrician from London, Jon Haynes stated that the recession had hit his business hard. He added: “I think taxes in general should be reduced to help small businesses, with fuel the number one priority.”
© Crimson Business Ltd. 2010