Rising costs are pinching small-business owners in the state, who remain reluctant to pass on price increases to their customers, according to a report released Thursday by the National Federation of Independent Business.
Of 350 Colorado businesses surveyed in August, half said the products they purchase have increased in price, a jump of 16 percentage points from May’s response.
Despite the increases, only 17 percent of those surveyed said they increased their selling prices in that time frame.
“The small-business community is very much in touch with their consumers,” said Vicki Agler, NFIB state director in Colorado. “They try hard to absorb the cost when they can.”
The survey was taken before Hurricane Katrina sent unleaded gasoline prices above $3 a gallon and pushed other commodity costs, from coffee beans to natural gas, higher.
The next NFIB survey in December should capture whether the current turmoil forces small businesses to capitulate and raise prices, Agler said.
Optimism about business conditions improved among small- business owners in the state, with 55.4 percent describing business conditions as good or very good.
More than six out of 10 described sales over the last three months as good or very good, up from 39 percent in the first quarter. The number of businesses reporting improved profits also rose.
The Mountain States Business Conditions Index from Creighton University also showed continued strength in the Colorado economy in August, although several measures declined slightly from July.
The index, which surveys supply managers and business leaders, fell to 67.4 in August from July’s brisk 72.9.
Manufacturers of durable and nondurable goods reported softer conditions, but transportation companies, except for those involved with air travel, reported improving economic conditions, according to the index, which also came out Thursday.
The Front Range Purchasing Managers Index from the University of Colorado at Denver showed a slight rebound in conditions in August. That index rose to above 54 after hitting 50.68 in July. A reading above 50 indicates continued expansion, while one below 50 indicates a contraction on both indexes.
To view the NFIB small-business survey online, visit www.NFIB.com/object/sbcco0905. html.
The Mountain States index can be seen at www.outlook-economic.com/RegionalEconomic Outlook/MountainStatesData/ Colorado.html.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
