Firms’ Expectations Concerning Inflation And Pricing Changes

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 2020 BIE Survey dated December 16, 2020 (involving 204 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations have remained relatively unchanged at 2.0 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” improved over the month and are near average levels. Year-over-year unit cost growth increased significantly to 1.7 percent, on average.
  • Quarterly question: Firms’ long-term (per year, over the next five to 10 years) inflation expectations increased significantly to 2.7 percent, on average.
  • Special question: Firms assessed how the price of their major product/product line or service changed over the last year. They then indicated how they expect the price to change over the next year and what their biggest concerns are for 2021. 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.