Small business running costs continue to fall

Small business running costs continue to fall
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The costs of running a small company fell by 1.4% in the first quarter of 2009 due to deflation, according to the latest edition of the Business Inflation Guide.

The report suggests that the UK's small businesses are experiencing unprecedented levels of deflation for the second quarter in a row. In Q4 2008 costs plunged to -2.9 per cent deflation.

Declining labour, advertising, vehicle and raw material costs have all contributed to the continuing falls in Q1 2009, however report authors MORE TH>N BUSINESS warn profit margins still remain under huge stress due to low demand for products and services.

Developed in conjunction with Warwick Business School, the BIG is a quarterly index that measures a basket of 20 of the most important expenditure items for small businesses. The index has been measuring the health of the small business economy for the last year.