Forecasted Inflation And Effects Of Supply Chain Disruption

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 August 2021 BIE Survey dated August 11, 2021 (involving 186 firms responding):

  • Inflation expectations: Firms’ year-ahead inflation expectations increased significantly to 3.0 percent, on average.
  • Current economic environment: Sales levels “compared to normal” remain unchanged. However, profit margins decreased slightly. Year-over-year unit cost growth increased significantly to 3.3 percent, on average.
  • Quarterly question: Approximately one-third of firms expect both labor costs and nonlabor costs to put significant upward influence on prices. About 24 percent of firms expect sales levels to put moderate upward influence on prices over the next 12 months, down from 38 percent previously.
  • Special question: Firms were asked to describe how COVID-19 has disrupted their supply chains and business operations. They then indicated the severity and expected length of both types of disruption. Additionally, firms provided their level of concern over the COVID-19 Delta variant and when they expect business operations to return to “normal.” 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.

—– 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.