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 October 2021 BIE Survey dated October 13, 2021 (involving 176 firms responding):
- Inflation expectations: Firms’ year-ahead inflation expectations remain unchanged at 3.1 percent, on average.
- Current economic environment: Sales levels “compared to normal” increased slightly. However, profit margins remain unchanged. Year-over-year unit cost growth increased significantly to 3.5 percent, on average.
- Quarterly question: Firms’ sales gap (percentage below “normal” unit sales levels) decreased slightly to 0.2 percent above normal, nonetheless, they remain at historically high levels.
- Special question: Firms were asked for their inflation forecast over calendar year 2022 and the next five years. They were then asked how useful monetary policymaker inflation forecasts are when making their pricing decisions. A breakdown of the results can be found in the special question section below.
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.