Firms’ Business Results And Ability To Pass Along Cost Increases

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 May 2024 BIE Survey dated May 22, 2024 (involving 310 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remained unchanged at 2.3 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” decreased over the month. Year-over-year unit cost growth remained relatively unchanged at 2.7 percent, on average.
  • Quarterly question: Over the past 12 months, firms saw prices rise by an average of 4.5 percent, but they project a more moderate increase of approximately 3.4 percent in the next 12 months.
  • Special question: Firms were asked about their ability to pass through cost increases. They were also asked about their current level of demand. A breakdown of the results can be found in the special questions section.

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

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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.

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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.