Here comes the real crunch time! Small M&E contractors in this country are now facing cost increases of an alarming 11.1 percent, which is twice the general rate of inflation. In the second quarter of 2008 alone, building contractors, electricians and plumbers were hit by cost increases of 4.2 percent, thanks to rising raw material and fuel costs.

These figures are revealed in the recently launched Business Inflation Guide, a quarterly measure of small business inflation that is jointly created by insurance provider More Than Business and the Warwick Business School.

The guide is designed to reflect changes in the price of goods and services bought by small businesses across the country. According to its findings, small M&E contractors are currently suffering from price increases across almost all expenditure items, predominantly in matters such as fuel, energy, labour costs and raw materials. As a result, these small businesses are desperately searching for savings while trying to secure help in every possible way.

“Now that we have a true picture of rising costs for contractors, people will be asking the government what realistic measures can be taken to support them, particularly in the current economic climate,???? claimed Mike Bowman, head of More Than Business.

“The top priority, if they haven’t already done so, should be to review all suppliers and negotiate on prices and payment terms – particularly with regard to energy suppliers and other important cost items. Seeking more efficient ways to use energy in the future should also be a priority,???? suggested Bowman.