Fall in Business Costs Can Mask Hidden Drawbacks of Deflation; IN ASSOCIATION WITH Rensburg Sheppards
THE cost of running a small business in the North West has entered negative growth for the first time in recent history.
But companies were warned that the fall in costs could also represent a double-edged sword.
The latest Business Inflation Guide (BIG), by Liverpool insurance group More Th>n Business, showed northern firms experienced a significant 3.8% fall in costs during the final quarter of 2008 due to the region's greater share of manufacturing firms.
In the UK overall the BIG reveals the dramatic drop in costs is largely due to a sharp fall in fuel prices, down 18.3%, and raw material costs, down by 11.95%. Manufacturing and contractors in the UK recorded the strongest rate of deflation with costs falling by 4.3% and 4.5% respectively.
Cost decreases for small firms in the North declined nearly 1% more than the rest of the UK, which has a national average of 2. …