Firms’ Long-Term Inflation Expectations And Effect Of Supply Disruptions

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 June 2022 BIE Survey dated June 15, 2022 (involving 185 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations remain relatively unchanged at 3.7 percent, on average.
  • Current economic environment: “Compared to normal,” although sales levels decreased, profit margins remained relatively unchanged. Year-over-year unit cost growth slightly increased at 4.3 percent, on average.
  • Quarterly question: Firm’s long-run inflation expectations significantly increased at 3.5 percent, on average, and 87 percent of firms are expecting their unit costs to increase in the long run. Both the long-term inflation expectation (3.5 percent) and the percent of firms that expect unit costs to increase very significantly (31 percent) are at an all-time high.
  • Special question: Firms were asked whether or not they experienced supply chain disruptions or delays. They were also asked, for those who experienced supply chain disruptions or delays, how they affected the firms and how they would describe the current supply chain disruptions or delays. 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.