Study: Energy Costs a Challenge for Some Small Firms

The Small Business Administration's Office of Advocacy released a study late last month that examined energy costs.

Characterization and Analysis of Small Business Energy Costs explores whether rising energy costs are harming small business growth.

The analysis found that small entities in the manufacturing and construction sectors pay higher prices for most, but not all, fuels. The price disparities are most pronounced for electricity and natural gas. Electricity costs for small businesses in the manufacturing sector accounted for the greatest price differential.

Companies with fewer than 50 employees pay 35 percent more for electricity than the sector average, while those with 1,000 or more employees pay 17 percent less than the sector average. The report concludes that small manufacturing sector entities that use substantial amounts of electricity are experiencing a significant competitive disadvantage.

The study was conducted by E.H. Pechan and Associates of Durham, N.C.

By Sharon McLoone |  May 5, 2008; 11:36 AM ET Data Points
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