Firms’ Responses On Inflation Expectations And COVID-19 Impact

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 2020 BIE Survey dated May 13, 2020 (involving 223 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations went virtually unchanged at 1.5 percent, on average.
  • Current economic environment: Sales levels and profit margins “compared to normal” remain at historically low levels. Year-over-year unit cost growth remains at 1.2 percent, on average.
  • Quarterly question: The majority of firms expect labor costs and non-labor costs to put moderate upward influence on prices over the next twelve months.
  • Special question: Firms indicated the degree of disruption they’ve experienced with regard to their sales activity, suppliers/supply chains, and ability to maintain adequate staffing levels as a result of the outbreak of COVID-19. They also provided their expectations of when these elements of their business might be free of disruption. 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.