Businesses’ Inflation Expectations And Expected Effects Of COVID-19

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, pricing, 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 December 2021 BIE Survey dated December 15, 2021 (involving 193 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations increased slightly to 3.4 percent, on average.
  • Current economic environment: Sales levels “compared to normal” decreased over the month, and profit margins remained unchanged. Year-over-year unit cost growth was also unchanged at 3.6 percent, on average.
  • Quarterly question: Firms’ long-term (per year, over the next five to 10 years) inflation expectations increased significantly to 3.2 percent, on average.
  • Special question: Firms were asked to provide their level of concern about COVID-19’s continued persistence as it pertains to different aspects of their business. They were then asked where they expect the state of the COVID-19 pandemic to be one year from now. Finally, firms provided their biggest areas of concern heading into 2022. A breakdown of the results can be found in the special question section below.

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


RevSD, 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.

—– is published by RevSD, LLC.  RevSD, 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.