Partner Article

Business costs falling in NE

The cost of running a small business in the North East has fallen sharply, according to a recent report.

Businesses in the North have seen costs fall faster than any other area of the country, with running costs falling by an average of 0.9% over the year.

Prices have fallen by an average of 1.4% over the first three months of 2009, according to the Business Inflation Guide, a quarterly index that measures a basket of 20 of the most important expenditure items for small businesses.

Due to a drop in demand across the UK, small businesses have experienced unprecedented levels of deflation, causing the decline in operating costs, with a nationwide fall of 1.4% over the first quarter of this year.

Declines in the cost of labour, advertising, vehicle and raw materials have all been contributory factors in the fall of operating costs, which follows a drop of 2.9% in the last quarter of 2008.

Mike Bowman at MORE TH>N BUSINESS, who authored the report, said: “The fact that we’re experiencing such sustained deflationary conditions demonstrates just how deep the recession has become in the UK.

“The volatility has made it very difficult to plan and invest, placing tremendous pressure on cash flows and managing stock and staffing levels. There are a lot of small businesses which have never experienced anything like this before.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .