Firms’ Expectations Regarding Year-Ahead Inflation And Pricing Influences

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 May 2018 BIE Survey dated May 16, 2018 (involving 170 firms responding):

• Inflation expectations: Firms’ inflation expectations decreased to 2.0 percent over the year ahead.

also:

• Quarterly question: The majority of firms expect labor costs and non-labor costs to have a moderate to strong upward influence on prices over the year ahead. The expected influence of sales levels on prices over the year-ahead has increased steadily since the May 2017 measure. The majority of firms expect productivity and margins adjustments to have little or no influence on prices over the year ahead.

The “special question” for the survey asked about firms’ level of optimism regarding their financial prospects as well as the overall U.S. economy.

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

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