News > December 2011 > Small manufacturers 'risk being squeezed out of market'

Small manufacturers 'risk being squeezed out of market'

21 December 2011

Poor conditions for manufacturers mean small businesses and sole traders in the industry risk being squeezed out, one company has warned.

A study carried out by More Th>n Business showed that little companies in the UK are experiencing annual inflation of 8.3 per cent, 60 per cent higher than that for consumers, SME Web reports.

The cost of raw materials was 17.5 per cent higher in September 2011 than in the same month in 2010, while decreased demand from Britain and Europe also took its toll.

This meant manufacturers were unable to pass on the costs to consumers as they may have done in the past.

For small businesses in general, inflation has hit a record high of 6.9 per cent, meaning many companies are unlikely to see their situation improve in 2012.

More Th>n's Mark Christer said: "Maintaining cash flow is of utmost importance and sound contingency plans are essential to cope with market lulls and price fluctuations."

This is despite a recent poll by Yell and the University of Southampton, which found that small firms can easily compete with larger ones in terms of their online presence.

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