We can’t imagine many readers will be surprised to read that costs are going up. But it’s disconcerting to learn that these companies are facing the highest quarterly rate of inflation since early 2008 - three times higher than last year’s average quarterly rate of 1.2%. Given that the Government is placing small manufacturers and its flagship Made In Britain campaign at the core of our recovery, this isn’t exactly ideal.
Small scale manufacturers are being hit the hardest, with costs up a hefty 4.2%. The over-riding message here: if you’re thinking of doing your bit for the UK economy by starting a small business, try to avoid actually making anything. You may also wish to avoid anything that requires a vehicle: hauliers are under intense pressure too. The rate increase on the price of fuel has more than doubled since last year and hit a record high of almost 10%.
And it’s not about to get any easier. With energy prices continuing to rise, margins will be squeezed even further in the second half of the year. ‘Small businesses are finding themselves trapped between slow growing markets and fast rising costs,’ said Stephen Roper, professor of enterprise at Warwick Business School’s Centre for Small and Medium Sized Enterprises, who conducted the research. Talk about a rock and a hard place. Roper’s advice is to aim at the export market. Which could be another catch-22: try passing on the rising costs to your export customers and see how that affects business.
Now we admit that’s not a particularly cheery prognosis. Anyone seeking a patriotic boost may wish to tune in to the BBC's Made In Britain series tonight. Some may feel that presenter Evan Davis glosses over a few harsh economic realities, but at least his picture's a bit rosier...