Higher energy costs have negative impact on small business owners

Fueled by a sense that rising energy prices might trip up economic growth, small business owners became less optimistic in March, said analysts with IHS Global Insight

By ·

Fueled by a sense that rising energy prices might trip up economic growth, small business owners became less optimistic in March, said analysts with IHS Global Insight.

This comes on the heels of six consecutive months of improvements in small business optimism. ??Furthermore, respondents expecting the economy to be worse in six months outweighed those expecting a better economy. Small business optimism is now standing at its lowest level since November.??After six consecutive months of improved outlook of future revenue, small business owners became less optimistic that sales will increase in the next three months. This is very problematic in light of increased fuel costs.

In an interview with Supply Chain Management Review – LM’s sister publication – economist Leslie Levesque said that retailer’s inventories are not likely to increase.

“Retailers have been keeping their stock at appropriate levels,” she said.??The higher fuel cost appears to have already trickled down, placing pressure on small businesses in charging more for their goods and services, however. The net percent of small business owners planning to raise prices in the next three months jumped to 6 percent, its highest reading since September.”??

“With a more lackluster outlook on inflation, sales and overall business conditions, it is no wonder employment expectations weakened,” said Levesque. “The drop in net respondents planning to hire brought the reading to its lowest point in almost a year. This is consistent with last Friday’s disappointing employment report.”??According to IHS, this is not a good report.

“The hit to small business optimism was expected and any relief in the near term will be limited as they try to cope with rising fuel costs. Small businesses expect lower sales, higher costs, and feel pressure to increase their prices.

“They are feeling squeezed,” said Levesque. “Under these conditions it is no surprise they do not feel like going on a hiring spree anytime soon.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Energy · Logistics · Trade · All Topics
Latest Whitepaper
Private Fleet vs. Dedicated: Which one is right for you?
Having the right fleet for your business can give you an advantage over the competition and lower transportation costs.
Download Today!
From the April 2017 Issue
While adoption rates have remained relatively flat, yard management systems (YMS) are helping logistics operations turn that important space between the loading dock and the gate into a vital link in the supply chain.
Information Management: Wearables come in for a refit
2017 Air Cargo Roundtable: Positive Outlook Driven by New Demand
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Maximize Your LTL Driver Adherence with Real-time Feedback
This webinar shows how companies are using real-time performance data to optimize the scheduling of their city fleets, as well as the routing of their standard, accelerated and time-critical shipments.
Register Today!
EDITORS' PICKS
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...

ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...