INFLATION is piling on the pressure for Kirklees companies, a survey has revealed.
Figures from Royal Bank of Scotland show that one in four companies has seen fuel costs soar by more than 10% in the past 12 months – twice the current Consumer Price Index inflation rate.
More than one in four has also seen the price of raw materials exceed the current 5% CPI rate of inflation.
The survey found that increased costs have made firms more determined to make cuts.
Achieving savings was seen as the most important commercial priority for 2012 with two-thirds of businesses polled saying they were looking to cut back.
But only 14% were looking to cut back on staff numbers.
Peter Russell, head of manufacturing sector for RBS Corporate & Institutional Banking, said: “There is little or no respite from increased energy costs for many medium-sized businesses.
“These are core costs which have a direct impact on price competitiveness.
“Whilst commodity prices have eased back of late, businesses remain focused on how to tackle mounting energy costs.
“In these difficult times, it is proving much harder to pass on these costs to their customers, leaving profit margins under significant pressure.”
The survey of more than 200 senior executives found other costs – often seen as non-core – had fallen in real terms.
Research and development costs have increased by an average of just 2.4%, advertising and marketing by 2.8% and legal costs by 3.3% – all well below the headline rate of inflation.