Firms’ Business Conditions And Factors Driving Pricing

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 February 2021 BIE Survey dated February 10, 2021 (involving 204 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations are relatively unchanged at 2.2 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” increased over the month. However, they remain near average levels. Year-over-year unit cost growth increased significantly to 2.1 percent, on average
  • Quarterly question: The majority of firms expect labor costs and nonlabor costs to put moderate upward influence on prices, while approximately one-third of firms expect sales levels to put moderate upward influence on prices over the next 12 months.
  • Special question: Firms were asked to describe their pricing ability since the outbreak of COVID-19. They were then asked whether COVID-19 contributed to the change in their pricing ability and whether they expected this change to persist after COVID-19. 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.