UK Trumps US And Japan In Business Competitiveness
At a time when businesses are concerned about rising costs, the UK has been found to be a cheaper business destination than some of its major rivals.
It may still be a tougher time to do business in the UK than it was before the financial crisis, but new research from KPMG has shown that Britain is a less expensive place to operate than some of its biggest rivals.
In its Competitive Alternatives report, KPMG placed the UK fourth out of ten countries studied in terms of the cost of doing business. The US is used as the baseline for comparing 26 key cost components associated with these core markets, and it emerged that companies in Britain face costs on average 5.4 per cent lower than those across the pond. Labour costs, taxes and available reliefs, property and facilities, transportation and the cost of utilities are all used to calculate the final standings.
Although the UK was one of the strongest performers in terms of low corporation tax, it was unsurprisingly beaten on the cost of electricity and natural gas. Concerns remain over the way that input costs are impacting on margins among British businesses. Prior to last week’s Budget statement, the Confederation of British Industry called for measures to help companies cope with energy bills in particular.
“One of the biggest challenges facing businesses is rising energy costs. We desperately need investment in energy, and British businesses are operating with one arm tied behind their backs,” director-general John Cridland said.
With major markets such as Japan in seventh place – a big improvement thanks to the falling value of the yen in recent years – and Germany is now the only country of the ten where it is more expensive to operate than in the US, UK businesses will be glad to see that the country is not lagging behind its international rivals.
The Netherlands came in just ahead of the UK, with businesses having to pay around 5.4 per cent less to operate there than in the US. But the differences became wider at the top of the league. In Canada, costs were 7.2 per cent below those reported in the States. But first place went to Mexico, where expenses were a dramatic 18.7 per cent below the US.