NICRE director Professor Jeremy Phillipson, Professor of Rural Development at the Centre for Rural Economy at Newcastle University, said: "It is crucial for businesses in rural - as well as urban - areas to be able to invest in order to grow and it is a considerable challenge for future innovation and expansion that rising costs are curtailing those efforts.
"While further evidence of rural enterprises demonstrating resilience in the face of adversity, this way of rural enterprises coping with the cost-of-doing-business crisis in the short-term may exacerbate long-term structural problems in the UK economy. Urgent attention should be given to how the adverse effect of the crisis on business investment can be best counteracted to support future business aspirations and plans."
Rural firms responding to NICRE's survey, like their urban counterparts, highlight rises in the costs of goods and raw materials, and increased costs of energy or power as having the greatest impact. Yet the cost of fuel for transport was identified as a much more prominent challenge by businesses in rural areas.
The data shows that firms have responded swiftly to these cost pressures, with many increasing the prices of their goods and services. Rural businesses, in particular, have been more likely to look to improve the efficiency of their production or processes, to have altered their range of products and services, and to have drawn on household labour and other resources to cope.