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.
An excerpt from the June 2016 BIE Survey dated June 17, 2016 (involving 219 firms responding):
Respondents indicated that, on average, they expect unit costs to rise 1.8 percent over the next 12 months. Inflation uncertainty remained stable at 2.2 percent. Firms also report that, compared to this time last year, their unit costs are up 1.4 percent. Respondents’ sales levels, compared to what they consider normal conditions, improved somewhat to a diffusion index value of -10 compared to -11 in May. Profit margins also improved, with a diffusion index value of -17 compared to -23 in May.
This month’s “quarterly question” concerned “Percent above/below normal sales levels.” An excerpt:
On average (weighted by industry share of gross domestic product), respondents indicated their unit sales gap (percentage below normal unit sales) was approximately 3.5 percent below normal compared to 3.0 percent below normal in March. On average, small firms (fewer than 100 employees) reported an increase in their sales gap to 9.2 percent. Midsize firms’ (100–499 employees) sales gap increased to 3.0 percent, and large firms (500 or more employees) sales gap increased to 1.9 percent below normal.
This month’s “special question” pertained to the “underlying cost forecasting when changing price.”
The report also includes 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.
ProfitabilityIssues.com 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.