Boost for business as costs of services fall
BUSINESS-to-business services costs fell last year, according to figures released by the Central Statistics Office (CSO) last night.
The figures are from an experimental index, known as the Services Producer Price Index (SSPI), which excludes costs reflected in the Consumer Price Index. The consumer index is a widely used measure of inflation based on the cost of a basket of household goods. The new measure of business services costs is based on a survey of companies.
The latest SSPI data shows companies in Ireland paid 1.1pc less for services in the last three months of 2010 than they paid a year earlier -- despite rising inflation across the eurozone.
It highlights the extent to which Ireland is becoming a more competitive place to do business, despite, or because of, the economic downturn.
However, while costs continued to fall the rate of decline has slowed in recent months. Business services costs were down 3.8pc at the end of June compared to the same time a year earlier. Costs were down 4.4pc in the three months to the end of 2009.
Nevertheless, the latest figures are positive for businesses that buy services, helping to bring down prices for the ultimate buyers of products.
Sea and coastal transport costs fell a staggering 10.9pc over the period, the biggest drop in any sector, according to the data.
That's good news for exporters shipping goods abroad but the steepness of the fall must also reflect a decline in demand for bulk shipping.
Less surprisingly, the cost of professional services linked to the construction sector fell more than 5pc over the same period.
Postal and courier service costs were higher in the final quarter of last year, up 3.6pc compared to the same time the previous year. Computer and IT consultancy costs rose 1.9pc.
Meanwhile, the eurozone trade deficit rose to €14.9bn in January compared to €9.7bn in December, according to the European Commission statistics office Eurostat. Eurostat's initial estimates show exports from the euro area were up 6.4pc in January while imports increased by 4.8pc.
Across the EU the trade deficit was just under €30bn in January, up from €22.7bn in December. The data shows the EU is a net seller of goods and services to the US, Switzerland and Turkey.
However the EU has a staggering €170bn trade deficit with China and significant negative trade balances with Russia, Norway and Japan.