With presidential debates and primary results dominating the headlines, talk of the economy, rising energy costs and other top issues are at the forefront. It seems like small business owners are no exception when it comes to citizens worried about the future. In fact, small businesses might be feeling the crunch of the current economy a little more. Small firms are hardest hit by rising energy costs, according to a study released by the Office of Advocacy of the U.S. Small Business Administration. The small manufacturing and small commercial sectors top the list of burdened industries, on an energy cost per value of industry shipments and an energy cost per sales basis. "This report shows that, on a disaggregated basis, energy prices can affect different industrial sectors in different ways," said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. "Previously, most research in this area had focused on the macro level. With this report, the spotlight turns to individual industrial sectors and the small firms within them." The report finds that for 10 of 17 manufacturing sectors for which data were available, small firms spent considerably more for energy than large firms did, on a per value of industry shipments basis. For food manufacturers, leather and allied products manufacturers, and computer and electronic products manufacturers, the costs per dollar of output were more than double those of their larger counterparts. The author also finds that in 26 of 31 commercial industries studied, small firms have higher energy expenditures on a cost per dollar of sales basis. The report, Characterization and Analysis of Small Business Energy Costs, written by E.H. Pechan & Associates with funding from the Office of Advocacy, uses available data to analyze the impact of changing energy prices on various sectors of the economy. For more information, a complete copy of the report and tables of analyzed industry sectors, visit the Office of Advocacy website at http://www.sba.gov/advo |
