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Rising business costs to hit indies

Indies are being warned to buy cautiously as commodity costs and supplier prices look set to rise.

The cost of running a small shop rose 0.5% in the third quarter of 2009 and is likely to rise further between now and April, according to the Business Inflation Guide (BIG), which is compiled by Warwick Business School for insurance firm More Th>n Business and measures 20 of the most important expenditure items for small firms each quarter. This is the second consecutive quarter in which costs have escalated.

Some of the largest price hikes were in fuel, which rose 3.4% and shopfitting, which rose 3.2%.

Stephen Roper, professor of Enterprise at the Centre for Small and Medium Sized Enterprises, Warwick Business School, said: “We expect small business costs to rise sharply at least until Easter, when we predict prices will reach the same level as they were before the recession. While costs are on the up, the disappearance of deflation means markets are strengthening and consumer spending is growing.”

Costs from product suppliers are also expected to rise on the back of a 0.63% increase in manufacturing costs in the third quarter of 2009.

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