The recent Retail and Consumer Industry Practice report issued by PricewaterhouseCoopers illustrates the ongoing impact of high fuel and energy prices on businesses.

"Sixty-five percent of the consumer products executives we spoke to see the price of energy as a barrier to growth. In contrast, only 50 percent of the cross-industries executives we surveyed thought energy costs would hinder their growth," said John Maxwell, leader of PricewaterhouseCoopers' Retail & Consumer Industry Practice.

Among the areas where the impact of escalating energy prices can be seen is in companies' future hiring plans, or lack thereof. For example, 65 percent of consumer products companies look at escalating energy prices as a potential barrier to growth, PricewaterhouseCoopers found.

"Rising energy prices have had a far-reaching impact on two-thirds of large companies in the consumer products industry. Businesses seeing themselves as vulnerable have been wise to promptly make adjustments," said Maxwell.

The survey also reported that 46 percent of what PricewaterhouseCoopers describes as "energy-vulnerable companies" plan to add to their workforce over the next 12 months, while 27 percent expect to cut back.

Overall, consumer products companies expect the size of their workforce to decrease by an average of 3.4 percent over the next 12 months, attributable to deep cutbacks by several large companies and caution stemming from rising energy prices.

"Many consumer products leaders have demonstrated caution in their hiring plans. Those in businesses that are more vibrant and less impacted by rising energy costs are continuing to press forward," said Maxwell.

Other results included:

• Gross margins: Twenty-seven percent of energy-vulnerable companies reported increased margins, and 46 percent had declining margins. In contrast, companies where energy prices are not seen as threatening had a net of 29 percent with increasing margins.
• New investments: Forty-two percent of energy-vulnerable companies plan to make major new investments averaging 5.8 percent of revenue—compared to 50 percent of non-threatened companies planning to invest at a much higher level, 9.1 percent of revenue.