Businesses have seen energy costs leap 60% in the past year according to new figures which reveal the increasing pressure British firms are facing in a time of economic crisis.
This increase in energy costs is having a direct effect on business’ bottom line, suggests the online switching site which released the research. uSwitchforBusiness.com points to BIS data which shows firms’ average turnover has decreased by 6.19% over the same time period.
Businesses now spend an average of 0.51% of their total profit on energy, a huge rise of 70% on 2010’s figures.
James Constant, Director of uSwitchforBusiness.com said: “Historically, businesses could afford to ignore energy costs, because they seemed almost negligible in relation to their profits. But with costs having leapt up from 0.3% to 0.51% of turnover in just one year, this is no longer the case.”
Energy could soon gobble up even more of businesses’ profits, he said: “If this trend continues, energy costs may soon hit 1% of total business revenues, a hugely concerning figure that should force businesses into acting fast.”
Although the future is unpredictable, he said it is worth planning ahead: “Businesses should therefore be sensible and think about cutting and offsetting costs when they have the opportunity. Switching suppliers, or even just your tariff, can save a business an average of £946 a year.”
The situation isn’t any better for homeowners, with the cost of household energy rocketing more than five times faster than household income since 2004/05, suggests the research from uSwitch.