The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
BIE December 2012 Atlanta Fed Survey of Business Inflation Expectations For immediate release: December 19, 2012 Contact: Jean Tate, 404-498-8035 or jean.tate@atl.frb.org The year-ahead inflation expectations of businesses in the Southeast fell to 1.9 percent in December, from 2.1 percent in November, according to the Federal Reserve Bank of Atlanta’s most recent business inflation expectations (BIE) survey. The survey was conducted December 10–14 with 207 firms responding to questions about their business conditions, inflation outlook, and potential pricing pressures. The results are summarized below. Year-ahead inflation expectations and current conditions Respondents indicated that, on average, they expect unit costs to rise 1.9 percent over the next 12 months. That number is down from 2.1 percent in November but roughly in line with the recent year-ahead inflation forecasts of private economists. Inflation uncertainty decreased by 0.1 percentage point to 2.5 percent in December. Firms also reported that, compared to this time last year, their unit costs are up 1.5 percent. Panelists also indicated improvement in both sales levels and margins after a notable decline earlier in the quarter. Quarterly question: Percent above/below normal unit sales levels On average (weighted by industry share of GDP), respondents indicated that unit sales levels are approximately 7.7 percent below normal, which is down slightly from the September measure of 7.6 percent below normal. Small (1–99 employees) and midsized (100–499 employees) firms’ sales gaps widened from 9.6 percent below normal in September to 10.3 and 11.1 percent below normal in December, respectively. Large firms’ (500+ employees) sales gap narrowed from 4.9 percent below normal in September to 2.1 percent below normal in December. Special question: Number of employees, hours, and effort compared to “normal” The December special question asked firms, “With regard to your workforce, how do the following (number of employees, average hours per employee, and effort per hour) compare to ‘normal’ times?” About 90 percent of firms indicated that they had the same or fewer employees than normal, and approximately 76 percent said their employees were working the same number or fewer hours. However, some 35 percent of firms indicated an increase in effort per hour compared to normal times. For more information and interactive charts, visit the BIE survey site at www.frbatlanta.org/research/inflationproject/bie/. How do your SALES LEVELS compare with sales levels during what you consider to be “normal” times? Much less Somewhat less About normal Somewhat greater Much greater Diffusion index* October 15% 45% 27% 12% 1% -30 November 17% 42% 29% 11% 2% -30 December 14% 41% 26% 17% 2% -24 How do your current PROFIT MARGINS compare with “normal” times? Much less Somewhat less About normal Somewhat greater Much greater Diffusion index* October 19% 42% 31% 8% 1% -35 November 15% 45% 34% 6% 1% -33 December 15% 37% 37% 11% 1% -27 Looking back, how do your UNIT COSTS compare with this time last year? Down (<-1%) About unchanged (-1% to 1%) Up somewhat (1.1% to 3%) Up moderately (3.1% to 5%) Up a lot (>5%) Average October 8% 29% 53% 7% 4% 1.4% November 7% 23% 56% 11% 4% 1.7% December 8% 27% 53% 9% 3% 1.5% Projecting ahead, to the best of your ability, please assign a percent likelihood to the following changes to unit costs over the next 12 months. October Down (<-1%) About unchanged (-1% to 1%) Up somewhat (1.1% to 3%) Up moderately (3.1% to 5%) Up a lot (>5%) Average (Variance) 6% 29% 40% 16% 8% 1.8% (2.5%) November 6% 23% 41% 20% 10% 2.1% (2.6%) December 7% 26% 42% 17% 8% 1.9% (2.5%) Quarterly question: By roughly what percent are your firm's sales levels ABOVE/BELOW "normal"? Number of responses Firm size Average percent above/below normal September December September December Small (1–99 employees) 92 100 -9.60% -10.29% Medium (100–499 employees) 43 45 -9.60% -11.11% Large (500+ employees) 49 52 -4.90% -2.12% All (weighted by industry share of GDP) 184 197 -7.60% -7.66% Special question: With regard to your workforce, how do the following compare to "normal" times? Number of employees Average hours per employee Effort per hour Greater than normal 9.9% 23.5% 34.7% About the same as normal 48.8% 59.3% 56.4% Less than normal 40.9% 16.7% 6.9% Unsure 0.5% 0.5% 2.0% Note: Percentages may not sum to 100 due to rounding. *The diffusion index is calculated as an average response such that each response of much less is assigned a value of –100; somewhat less is assigned a value of –50; about normal, 0; somewhat greater, 50; and much greater, 100. Therefore, a positive index value implies that the indicator is greater, on average, and a negative index value implies that the indicator is lower, on average. †The diffusion index is calculated such that each response of strong downward influence is assigned a value of –100; moderate downward influence is assigned a value of –50; little/no influence, 0; moderate upward influence, 50; and strong upward influence, 100. Therefore, a positive index value indicates that overall prices are being influenced upwards, on average, and a negative index value indicates that prices are being influenced downwards on average.