30% of businesses switch electricity provider in attempt to reduce costs

ONE-in-three businesses switched electricity supplier in the final quarter of 2010 as businesses fight to reduce costs, according to research undertaken by Perceptive Insight and Oxford Economics on behalf of InterTradeIreland.

The research indicates 69% of businesses have seen a rise in energy costs, with 59% experiencing an increase in transport costs and 57% having an increase in rates and taxes.

“Similarly, 49% have seen an increase in the cost of insurance and professional fees.

“In summary, 82% of business North and south do not expect any decrease in the cost of doing business over the next 12 months,” the data shows.

Southern businesses are shopping around with 37% of businesses having switched electricity supplier. The research, from October to December, indicates while export companies are increasing revenues (28%), this is not resulting in job creation, with only 7% increasing employment pointing to a jobless recovery.

The research undertaken with 1,000 business managers across Ireland, North and south reveals global cost pressures are making a difficult trading environment even tougher. About 50% of businesses have witnessed an increase in supplier costs compared with 12 months ago.

On the employment front just one in 20 businesses (5%) said they had increased staffing levels in the past quarter; 18% reported having to reduce employee numbers (net -13% points). Quarterly trends show a little negative movement with the net difference changing from -8% points in Q3 to -13% points in Q4.

On the export side, companies are twice as likely to have increased sales as those focused domestically and 44% are expecting a sales rise over the next year. Strategy director at InterTradeIreland Aidan Gough, said: “Improvements in cost competitiveness are in danger of being jeopardised as companies are indicating they are experiencing rising costs from many of their suppliers, coupled with rising energy and transportation costs.

“The imperative is to ensure that Ireland remains competitive especially where we have control over costs in relation to rates and taxes. While exports will drive economic growth, it is equally disappointing to learn this recovery is likely to be jobless, with exporters experiencing revenue growth but unlikely to increase employee numbers over the medium term,” he concluded.