Isme: State costs threaten sector

The public may be relieved that consumer prices are not rising rapidly, but business body Isme believes stagnant prices and rising wages are eroding companies’ margins.

Isme’s reaction came after the Central Statistics Office reported the rate of inflation fell marginally since January to 1.1% as the cost of communications and furnishings pushed inflation down.

Isme chief executive Mark Fielding said: “Even with a slight improvement in our competitiveness, there is still a long way to go to regain previous levels. Many existing SMEs find it extremely difficult to profit from any productivity increases or cost reductions because of legacy leases, long-term agreements and old wage rates.”