ABSTRACT
Groupings such as wages and salaries, other staff-related costs (National Insurance, pensions, etc.), energy, spares and materials, insurance, depreciation, rent and interest charges indicate the main inputs and their relative importance. For example, in countries such as Britain the staff-related costs comprise about 65 per cent of the total, but energy only about 10 per cent. This type of classification is useful in highlighting the importance of different inputs and hence likely future trends: thus change in real labour costs is likely to be the predominant factor in determining overall rates of change (in the absence of productivity change), rather than that in energy costs. However, this may differ in other countries, with energy costs forming a substantially higher proportion in developing countries, for example. Costs expressed in local currency will also be affected by changes in the exchange rate. For example, in a country with a falling exchange rate, oil prices (in dollars) will form a growing proportion of costs expressed in local currency. In the British case this factor applies to fuel, and also spares/new vehicles in view of the high import element now found.
