Businesses will be affected by increases in the direct costs of producing and transporting their products or inputs. Businesses will also be affected indirectly, however, by significant changes in demand for some products. Every economic sector is likely to produce both winners and losers.

Manufacturers of products that are energy-intensive to produce will likely be among the first businesses to experience the adverse impacts of peak oil.  In particular, suppliers of inexpensive raw materials that require high amounts of energy to extract or harvest and imported semi-processed components that are energy-intensive to manufacture may be some of the first to face increasing costs.

In addition to changes in the way that inputs are shipped, distribution of finished goods to consumers may change as well.  Fewer non-essential or low-value products may be distributed to retail outlets and consumers by air and long-haul truck.  Proximity to transportation hubs may also become a more important factor in the location of production facilities in order to limit exposure to rising freight costs.  Similarly, proximity to employees and customers will become a more important factor in business decisions about where to locate.

Businesses that are located farther from population centers or that depend on the willingness of consumers to drive significant distances to shop may experience a sharper decline in sales than centrally located businesses.  Neighborhood retail and other consumer services may gain customers as larger, more distant stores become less economic.  At the same time, however, while local businesses may experience increased sales, they also may experience a disproportionate increase in the transportation cost of supplying such retailers as a result of the inability to carry large inventories.

Businesses that depend heavily on discretionary consumer spending are at risk, especially those goods and services for which there are readily available substitutes, that are considered luxuries, or whose purchase can be put off.  Industries that may experience a particularly strong decline in sales include restaurants, tourism, personal services, recreation, home furnishings and consumer electronics. Additionally, there may also be disproportionately less demand for consumer products that require oil or natural gas to operate.

Overall, the effects are difficult to predict. Policy makers should be aware that the challenges faced by businesses will be large and that the risk of business failure is great.