Subscribe to our free, weekly email newsletter!


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 Patrick Burnson, Executive Editor
April 10, 2012

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

image
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 .(JavaScript must be enabled to view this email address).


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!

Recent Entries

Largely feeling the effects of the recently resolved West Coast ports labor disruption, railroad and intermodal volumes in February were down annually, according to data released by the Association of American Railroads (AAR) this week.

The year 2015 marks a major milestone for the industry, MHI is celebrating its 70th anniversary at ProMat 2015, held March 23-26, 2015.

While the Federal Motor Carrier Safety Administration has made strides in regards to better oversight of motor carriers through its Compliance, Safety, Accountability (CSA) and chameleon vetting safety programs, there is room for improvement for it to improve its oversight to better target high-risk carriers. That was the thesis of a report released this week by the United States General Accountability Office

With an eye on capitalizing on future trade and commerce growth in South Asia, express delivery and logistics services provider DHL today rolled out its plans to build an $85 million EUR ($93 million USD) DHL Express South Asia Hub, which will be a 24-hour express hub facility within the Changi Airfreight Center at the Singapore Changi Airport.

While the Federal Railroad Administration (FRA) has long stated its goal of having Positive Train Control (PTC) technology installed on 40 percent of its network by December 31, 2015, railroad industry stakeholders have repeatedly stated that reaching that deadline would be a stretch. It now appears that the railroad sector has some members of Congress sharing the same line of thought with legislation rolled out this week that pledges to extend the PTC deadline to 2020.

Article Topics

News · Energy · Logistics · Trade · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA