On Wednesday, Statistics Jersey released its latest Business Tendency Survey, which indicated good levels of employment growth, increasing business activity and confidence among the Island’s firms.

But despite the generally good news, 56 per cent of businesses reported increasing ‘input costs’, meaning the cost of buying supplies and products for their business increased over the past three months.

This was particularly felt in the non-finance sector where 65 per cent of businesses reported increased input costs.

Overall, nearly a quarter of businesses reported that they had to increase their prices.

A net percentage of 12 per cent of non-finance firms also saw a decline in profitability over the quarter.

Earlier this year, Jersey reported its highest annual inflation level in six years, when the June Retail Price Index reached 4.5 per cent.

Greg Boyd, a senior economist at the States, said that the reported increase in input costs had been a continued trend since the 2016 referendum on EU membership, after which the value of sterling slumped, driving up the cost of imports.

‘It looks like it [input costs] has been rising since the referendum but just a little bit less in the last quarter,’ he said.

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‘And if you look at product prices they have gone up. We have seen higher inflation in the last quarter and the new inflation figures are out this Friday, so it will be interesting to see the impact on retail prices then.’

Mr Boyd said that otherwise the statistics indicated Jersey’s economy was doing quite well this year, including in the area of jobs growth.

‘The survey can be volatile from quarter to quarter, but during 2018 there has been continuing expansion in the economy and positive employment indicators,’ he said.

‘We have seen one per cent growth this year but uncertainty remains in terms of Brexit.’

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He added that the rising inflation could be tackled by improving productivity – the value of goods and services output per worker.

‘If we improve productivity performance we can produce more for less,’ he said.

‘And, if we follow the advice of the Fiscal Policy Panel, the government will not add demand to [stimulate] the economy at a time when the private sector is booming.’