NEW YORK | A Federal Reserve-linked survey of chief financial officers suggests many companies have absorbed much of the recent oil-price shock without fully passing it through to consumers.
Reuters reported that most firms in the survey saw higher production costs from the oil shock, but a smaller share raised prices, while many reported stable or rising demand. The Energy Information Administration’s June outlook still points to fuel-market pressure tied to global supply disruptions and demand changes.
That leaves businesses with a difficult margin problem. Absorbing costs can protect demand, but it can also narrow margins, delay investment and intensify pressure on lower-margin operators. Passing costs through can preserve margins but risks losing price-sensitive customers.
The business question now is whether lower crude prices become durable enough to relieve pressure, or whether companies face another round of fuel, freight and input-cost decisions later in the summer.
Additional Reporting By: Reuters; U.S. Energy Information Administration; Yahoo Finance.