NEWSRELEASE
For Release: April 22, 2008
Contact: John McDowell, (202) 205-6941
john.mcdowell@sba.gov
SBA Number: 08-09 ADVO
Press Kit
Small Firms Hit Hardest By Rising Energy Costs
Manufacturing And Commercial Sectors Top The List
WASHINGTON, D.C. – Small firms are hardest hit by rising energy costs, according to a study released today 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 median commercial sector industry has a small entity energy cost per sales ratio that is 2.7 times the ratio for large entities.
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
www.sba.gov/advo.The Office of Advocacy, the “small business watchdog” of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.
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The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. For more information, visit
www.sba.gov/advo, or call (202) 205-6533.