The Atlanta Federal Reserve publishes a monthly report titled “Business Inflation Expectations” (BIE) that contains statistics from a survey of regional businesses’ views on various factors that impact profitability. These factors include unit costs, unit cost expectations, sales levels, profit margins, and other factors.
As described on the site:
Approximately 300 panelists receive the survey each month. Panelists represent businesses of various sizes headquartered within the Sixth District, which encompasses Alabama, Florida, Georgia, and sections of Louisiana, Mississippi, and Tennessee. Panelists range from executives of large corporations to owner-operators of small businesses. The industry composition of the panel roughly reflects the makeup of the national economy. Nevertheless, survey responses are weighted by industry shares of national gross domestic product.
An excerpt from the June 2014 BIE Survey (pdf) dated June 20, 2014 (involving 242 firms responding) :
Respondents indicated that, on average, they expect unit costs to rise 2.0 percent over the next 12 months. Inflation uncertainty was unchanged at 2.4 percent. Firms also report that, compared to this time last year, their unit costs are up 1.9 percent. Respondents’ sales levels compared to what they consider “normal” conditions improved somewhat, with approximately 57 percent of respondents indicating current sales levels are at or above normal. Profit margins declined somewhat, with roughly 44 percent of respondents indicating their profit margins are at or above normal, compared to 47 percent in May.
This month’s “quarterly question” concerned the amount above or below normal unit sales levels. As seen in the report:
On average (weighted by industry share of GDP), respondents indicated their unit sales gap (percentage below normal) was approximately 3.7 percent, compared to 5.7 percent below normal in March.
Since the March measure, firms of all sizes have experienced a narrowing of their unit sales gap. Large firms’ (500 or more employees) unit sales gap narrowed 1.3 percentage points to 1.7 percent below normal, on average. Midsize firms’ (100–499 employees) unit sales gap narrowed by 3.1 percentage points to 2.5 percent below normal, on average. Small firms’ (less than 100 employees) unit sales gap narrowed by 1.3 percentage points to 7.8 percent below normal, on average.
Furthermore, the “special question” asked respondents about their expectations for year-ahead unit sales expectations.
The report also includes a variety of charts depicting respondents’ answers.
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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with all (or any) of the views expressed by these outside parties.
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ProfitabilityIssues.com is published by StratX, LLC (stratxllc.com). StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and given these conditions, offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.