Firms’ Inflation Forecasts And Business Expectations

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 March 2024 BIE Survey dated March 20, 2024 (involving 307 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remained relatively unchanged at 2.4 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” remained relatively unchanged over the month. However, year-over-year unit cost growth increased significantly to 2.8 percent, on average.
  • Quarterly question: Firms’ long-term (per year, over the next five to 10 years) inflation expectations remain relatively unchanged at 2.8 percent, on average.
  • Special question: Firms were asked about their expectations for the prime rate, sales revenue, number of employees, and capital expenditure expectations for year-end 2024. They were also asked about their expectations regarding sales revenue, number of employees, and capital expenditures if the borrowing rate is either 2 percent higher or 2 percent lower than their original expectations. 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.

—–

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.