Small and medium-sized manufacturers have sharply raised the prices of their goods to try to tackle the strongest cost pressures in over 20 years, a CBI survey revealed today.

Adding to this difficult climate, demand for their goods has fallen both at home and abroad.

Yet despite this, job numbers are growing in the sector, and the smallest firms have been particularly active in hiring new staff.

During the three months to April, 51 per cent of survey respondents said that their average unit costs had gone up, and seven per cent said they had decreased. The resulting balance of plus 43 per cent is the strongest in over 20 years, driven by much higher energy and raw material costs.

SME manufacturers are now passing on these growing cost pressures to customers. A balance of plus 20 per cent of firms raised domestic prices over the last three months, which is the strongest since April 1995 (plus 32 per cent), and a similar number expect to do so in the coming three months.

1:00pm Monday 12th May 2008

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