SMALL BUSINESS INSIDER
by Raymond J. Keating –
The costs of high inflation are being felt throughout the entire economy. Consider the rising cost of inputs for small businesses.
The latest Small Business Pulse Survey from the U.S. Census Bureau offers insights on the operations and views of small businesses in various areas, with this latest week’s survey covering April 4-10, 2022. The topics that small businesses are polled on include prices paid for inputs.
Source: U.S. Census Bureau, Small Business Pulse Survey, April 4-10, 2022
When asked how prices paid for goods and services by small businesses have changed over the past six months, 40.4 percent said they faced large price increases, and 37.7 percent confronted moderate increases in prices. That compared to 20.6 percent that saw little or no change, 0.6 percent experiencing a moderate decrease in prices paid, and 0.7 large decreases.
That means 78.1 percent of small businesses have had to deal with moderate-to-large increases in prices paid for inputs.
This is new territory for many entrepreneurs, given that inflation in the U.S. remained fairly low, other than a short bout here and there of general price increases, since the 1980s. And make no mistake, high inflation is brutal for many small businesses operating on thin margins, and many with limited abilities to pass on increases in costs to customers.
There is no escaping the ills of inflation – from consumers to investors to large businesses to small firms.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.