High gas prices are hitting small businesses directly in the wallet, a small-business advocate told a House subcommittee this week. Nearly three-quarters (74 percent) of small-business owners report that hard times at the pump are affecting them and their customers.
These prices are "making it very challenging for small businesses to compete, to grow and even survive in what remains a difficult economic environment," Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council (SBE Council), told the House Committee on Oversight and Government Reform's subcommittee on regulatory affairs, stimulus oversight and government spending yesterday (May. 25).
Higher gas prices are hitting the two major pain points for small business: upward pressure on costs and reduced consumer spending, Kerrigan testified.
"For many small businesses, sales and revenues remain weak while business costs continue to move higher," she said.
Kerrigan shared data from a recently released SBE Council study that found that small-business owners are feeling the pinch of higher gas prices and its effect on jobs.
Nearly half (47 percent) of small-business owners reported that higher gas prices are curtailing their plans to hire new employees and another 26 percent have cut employees of their hours worked. Higher gas prices have also called into question the very survivability of their businesses, owners said; 38 percent believe that if gas prices remain high or increase further their businesses will not survive.
Higher gas prices, Kerrigan said, are undermining the economic recovery .
"Especially as the nation is working to emerge from the recession, it is more important than ever that our small businesses operate in a more predictable environment," she testified. "Without such, small business growth will remain stunted and these firms simply will not be able to create the large-scale number of jobs that are desperately needed."
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Reach BusinessNewsDaily senior writer Ned Smith at firstname.lastname@example.org. Follow him on Twitter @nedbsmith.