Businesses Expectations For Trends In Unit Costs

The Federal Reserve Bank of Atlanta 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.

Two excerpts from the November 2017 BIE Survey dated November 15, 2017 (involving 168 firms responding):

• Inflation expectations: Firms’ inflation expectations increased to 2.0 percent over the year ahead.

also:

• Quarterly question: Sixty-one percent of respondents expect labor costs to put upward pressure on prices over the year ahead. Fifty-six percent of respondents expect nonlabor costs to put upward pressure on prices over the year ahead. The majority of firms expect sales levels, productivity, and margin adjustments to have little or no influence on prices over the year ahead.

This month’s special question was how the passage of the Tax Cuts and Jobs Act in its current form would affect their capital investment and hiring plans.  The report shows the responses.

The report also includes other questions and a variety of charts and tables depicting respondents’ answers.

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