Business Costs Survey Released - Higher Costs On The Way

3 February 2011 NEWS RELEASE

Business Costs Survey Released - Higher Costs On The Way

The Main Report Business Week's Business Costs 2011 predicts a year of relentless cost increases.

The business community can expect another year of higher costs. The Main Report's Business Costs, which is produced yearly, predicts of 23 categories of costs it covers, including rent, human resources, couriers, insurance, and computing, 16 will rise, 6 will stay the same and just one will go down.

Research analyst Tony Doe says while the economy continues to stutter back to recovery, many sectors are looking to recover their own higher costs from their customers as operating expenses rise.

Among the reasonably good news is the interest rate outlook - the Reserve Bank is not likely to push rates up quickly to counter inflation, despite a prediction it may go over 5% by year's end. And while the high dollar may not help exporters, it will assist businesses in keeping imported costs under control. Wages are expected to stay under reasonable control as well at least until year's end.

A big imponderable this year will be oil - it has already hit $US100 a barrel, and may go higher, driven by developing world demand and uncertainty over middle-east politics.

The only business cost which is expected to go down this year is computing, as hardware continues to get cheaper due to lower manufacturing costs and intense competition among re-sellers.

ENDS

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