Manufacturing companies across the UK are being hit by an annual inflation rate which is 60% higher than that experienced by consumers, new research by More Th>n Business has revealed.
The rate of inflation manufacturers have to deal with, 8.3%, is putting a lot of smaller manufacturing businesses at risk of being squeezed out of the domestic market, as operational costs continue to hit new highs.
The majority of the inflation is being caused by increasing costs of raw materials, which are now 17.5% more expensive than they were 12 months ago. Together with higher energy costs, gas and electricity are up 11.8% and 7.1% in the last 12 months, it is no wonder that manufacturers are being pushed to the limit currently.
The study also revealed that small businesses across all sectors are in fact seeing record inflation, as the figure of 6.9% dwarfs all records held since 2005.
Even with a slight summer slowdown in inflation, prices are expected to have risen sharply in the last few months of 2011, as small businesses prepare to knuckle down for another challenging calendar year.
Cashflow funding solutions for Manufacturers
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