Doing business is cheap in the UK.
The UK is an attractive place to locate your company, according to a new study from KPMG. Business costs in Britain are amongst the lowest in the G-7, with only Canada offering lower costs. Japan, despite its recession, remains the costliest country for companies to work in. KPMG ranked the countries according to an annual cost index, with the US as 100 on the scale. While Canada scored 92.2 on the index, and the UK 94.8, Japan came in at 121.9. The survey used three cities in each country as a basis for comparison. KPMG selected one emerging city (in the UK, Telford), one restructuring city (Cardiff) and one mature city (Manchester) to analyse average costs. While the UK did well overall, start-up costs are higher than average. To establish a medium-sized (90 to 120 employee) operation in the UK would cost (on the KPMG worked example) just over $7.6m, compared to $3.8m in the US and, thanks to high land costs, $47m in Japan. But the UK is cheaper than the US on annual costs – $7.9m against $8.7m. The UK scores well on labour, road and sea freight, electricity and depreciation costs; but we fall down slightly on air freight, leasing, interest payments and taxation. As far as specific industries are concerned, the UK is the cheapest in the G-7 for food processing (largely, claims the survey, due to low freight costs) and vies closely with Canada in metal fabrication, pharmaceuticals and plastics. The three UK cities topped the list for the whole of Europe, with Telford the lowest cost location by a narrow margin from Cardiff. Globally, Sherbrooke in Quebec is the cheapest place to do business.