Treasury and finance professionals do not expect energy prices to spike to previously record high levels, a new survey has found.
The survey, conducted at the Association for Finance Professionals (AFP) annual conference, polls 753 finance professionals. Twelve percent expect significant increases in the price of electricity, but more than half (52 percent) only expect a "slight" increase over the next year.
Fourteen percent of organizations experienced a significant drop in profitability resulting from the volatility in energy costs, and 70 percent reported no impact on the demand for their goods or services as energy prices increased, according to the AFP.
Only 22 percent of respondents indicated that their organization raised prices of their goods and services. Other strategies cited to deal with rising energy costs included:
- Risk management techniques, including hedging and options strategies(more than 20 percent)
- Greater use of energy efficient processes (18 percent)
- Reducing employee travel (16 percent)
Finance professionals were more likely to individually have taken actions than had their employers to address the impact of rising energy costs. Personal actions include:
- Reduced discretionary driving (42 percent)
- Used less energy for home heating/cooling (39 percent)
- Saved less money to pay for increased energy costs (23 percent)
- Reduced discretionary non-energy purchases (21 percent)
- Cancelled or scaled back vacation (11 percent)
- Purchased a more fuel efficient vehicle (10 percent)
Additionally, 48 percent polled expect only a slight increase in oil prices in the next 12 months and more than a third (35 percent) of respondents believe that petroleum prices will remain stable or even drop over the next year. The survey can accessed online at the AFP Web site.
