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| ![]() August Producer Prices Raise New ConcernsRising Energy and Supply-Chain Costs Could Disproportionately Affect Minority Firms
The U.S. Bureau of Labor Statistics reported that producer prices increased 0.4 percent in August and 5.4 percent over the past year. Final-demand goods prices rose 1.1 percent, while energy prices increased 4.2 percent. One of the most concerning figures for minority businesses was a 24.1 percent monthly increase in diesel fuel prices. Transportation and warehousing prices increased 2.3 percent, while truck freight transportation rose 2.0 percent. "These numbers represent real operating costs for minority-owned trucking, construction, delivery and distribution companies," said William Michael Cunningham, economist and CEO of Creative Investment Research. "The problem is not simply inflation. It is whether small businesses have sufficient access to capital to absorb these increases." Cost pressures deeper in the supply chain are also significant. Prices for processed goods for intermediate demand increased 1.8 percent in August and 11.5 percent over the past year. Producer prices excluding food, energy and trade services were 4.7 percent higher than a year ago. Creative Investment Research cautions that inflation can have unequal consequences across businesses. Large corporations generally have greater access to cash, credit and supplier discounts, while smaller minority-owned firms often operate with thinner margins and less access to affordable financing. "When fuel, materials and inventory become more expensive, minority businesses need additional working capital simply to maintain the same level of operations," Creative Investment Research recommends that corporations, financial institutions and policymakers expand working-capital financing, accelerate payments to minority suppliers, and strengthen supplier-development and procurement programs. "Supporting minority businesses is also part of the solution to inflation," Cunningham said. "More suppliers mean greater competition, stronger supply chains and increased productive capacity." For more, see: https://www.impactinvesting.online/ End
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