People with lower incomes will be more affected as the amount spent on fuel will be a larger portion of their income. Also those who commute longer distances to work will be more affected. And if you are a business that depends on fuel use and where it represents a higher percentage of your overall expenses than other companies you may have a difficult time maintaining profitability.
So how do you avoid this and look toward ways to minimize this risk in the future?
If your business is close to a populated downtown the better your long term viability will be as your raw and finished products will either have less distance to travel or you may have access to valuable transportation distribution hubs. Also, you will have a greater employee base to draw from. These employees will have to spend less on fuel to travel to work or may have mass transit choices which could reduce the compensation they need to stay in the right economic bracket. And while people still seem to prefer living in the country or suburbs in many parts of the country, as gas prices rise they will start to migrate closer to towns and cities and the abundances of services.
With an increased demand by people to live closer to the city and larger towns there will be more demand for in-town residential units such as apartments, condos and cooperatives.
Manufacturing and warehousing businesses will need to locate where they can minimize their energy costs and rail-served buildings will command a premium.
Will the new norm be mixed use communitues? Living, working, eating and shopping all in the same location, even the same building? Something to think about.
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