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 October 2013 BIE Survey (pdf) dated October 16, 2013 (involving 216 firms responding) :
Respondents indicated that, on average, they expect unit costs to rise 1.9 percent over the next 12 months, roughly in line with the recent year-ahead inflation forecasts of private economists. Inflation uncertainty was unchanged at 2.4 percent in October. Firms also report that, compared to this time last year, their unit costs are up 1.7 percent. Sales levels declined in October, with roughly 46 percent of respondents saying their current sales levels are at or above normal compared to 52 percent in September. Profit margins also declined, with only 41 percent of respondents indicating their profit margins are at or above normal, compared to 49 percent in September.
This month’s “quarterly question” concerned annual inflation expectations over the next five to ten years. As seen in the report:
Over the long term, that is, per year over the next five to 10 years, respondents expect unit costs to increase 2.7 percent, on average, virtually unchanged from the July reading of 2.8 percent, but the lowest measure to date. Respondents’ uncertainty regarding this expectation was 2.4 percent.
Furthermore, the “special question” asked respondents about their expectations for year-ahead unit sales growth. The average growth was 1.9%.
The report also includes a variety of charts depicting respondents’ answers.
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.
StratX, LLC (stratxllc.com) 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.