Washington, D.C. (Press Release – March 14, 2012) – Results of a survey released by the Small Business & Entrepreneurship Council (SBE Council) find that high gas prices are taking their toll on the nation’s small business owners. In the group’s most recent “Entrepreneurs & the Economy: Trends, Issues and Outlook” survey, 72 percent of respondents say that higher gas prices are impacting their business.
“The fragile economy is being undermined by high gas prices. The weak recovery and policy uncertainties are already weighing on the confidence and minds of small business owners. Now they must find a way to cope with higher fuel costs. Unfortunately, their choices are limited,” said SBE Council President & CEO Karen Kerrigan.
The survey, fielded between February 21 and March 2, 2012 by TechnoMetrica, polled 304 small business owners (overall margin of error +/- 5.4 percentage points at the 95 percentage level). During the course of the survey and following its completion, gas prices continued to increase. For example, according to the Energy Information Administration, the weekly average price for regular gasoline climbed from $3.641 per gallon as of February 27 to $3.747 per gallon as of March 12.
Small business owners are dealing with these higher costs by cutting employee hours and raising prices – two options that hurt their competitiveness and the health of the overall economy, according to SBE Council. When asked about their responses to higher gas prices:
- 41 percent of small business owners said higher prices were affecting their plans to hire.
- 22 percent of small business owners have cut back on employee hours.
- 40 percent of small business owners have raised their prices.
Astonishingly, 43 percent of respondents agreed with the following statement: “My business will not survive if energy prices continue to remain high or increase further.” (23 percent strongly agreed with the statement.)
SBE Council chief economist Ray Keating noted, “Very few businesses are immune from the negative effects of rising energy costs. As a result, entrepreneurs and managers have to make tough decisions, none of which are positive for their businesses, for workers seeking employment or worried about their current jobs, or for the economy in general.”
According to the survey, there is intense dissatisfaction with the overall direction of federal policies meant to help the economy in general: 61 percent of small business owners are not satisfied with economic policies from Washington. Only 6 percent are “very satisfied” while 30 percent are “somewhat satisfied.”
In terms of stress levels related to their business finances, 46 percent of small business owners are feeling the same level of stress today as in the past three months, 38 percent say they are more stressed, while 14 percent feel less stressed. Despite this, 42 percent believe their financial conditions will get better. However, 42 percent say they will remain the same, while 13 percent believe their finances will get worse.
Keating added, “While prices at the pump are affected by various factors and events, including political risks in the Middle East and U.S. monetary policy, the President and the Congress play key roles as well by either erecting or removing obstacles to domestic energy production.”
Kerrigan added: “The surge in gas prices underscores the need for the Administration to move without haste on advancing pro-energy policies, including the approval of the Keystone XL pipeline. The U.S. cannot allow world events, supply disruptions and global demand surges to control the fate of our economy or global competitiveness. We must take full advantage of the natural resources we have been blessed with as a nation and move forward on a genuine ‘all-of-the-above’ energy strategy.”
SBE Council is a nonprofit, nonpartisan small business advocacy organization dedicated to protecting small business and promoting entrepreneurship. For more information, please visit: www.sbecouncil.org.