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According to a July 2022 survey by the National Association for Business Economics (NABE), the US economy is moving slowly, but struggling to gain momentum as the coronavirus pandemic is causing a resurgence.
Almost half of the respondents reported an increase in sales in the second quarter of 2022, a decrease of 14 points from those who reported an increase in sales in April 2022.
“The results of the July 2022 NABE Business Survey show signs of a slowdown in the US economy,” said Julia Coronado, vice president of NABE. “The majority of the companies surveyed still report an increase in sales, but their share has dropped sharply from the previous quarter.”
The Net Sales Increasing Index (NRI), the difference between those who reported an increase or decrease in sales, decreased by 22 points to just 30%, the lowest level since July 2020.
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Federal Reserve Chairman Jerome Powell spoke at the National Business Economics Society’s Economic Policy Conference on March 21, 2022 in Washington, DC. (Getty Images)
A NABE survey found that 38% of companies reported an increase in their employment, reaching a four-year high, and employment in the United States continues to increase. However, optimism for the future has diminished, as only 24% of companies expect employment to continue to grow.
US companies are making profits and resuming employment, but the cost of doing business is also increasing and the rate of return is declining.
In the report, NRI for material costs (business owners reporting rising and falling costs) rose to 76%. This is the highest number ever since NABE first asked in 1994.
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The study also found that corporate profit margins fell 22% from 26% in the previous quarter as fluctuating labor markets and ongoing supply chain problems increased production costs.
“Rising material and labor costs are squeezing the profit margins of many companies,” said Jan Hoglev, chief economist at Boeing Commercial Airplanes, NABE Business Condition Survey Chair. “For the first time since the October 2020 survey, the July survey shows that many companies report a decline in profit margins rather than an increase in profit margins.”
Traders will work on the New York Stock Exchange floor during the morning trading in New York City on July 13, 2022. (Michael M. Santiago / Getty Images / Getty Images)
“There is also an increased risk of recession among respondents,” he added. “Although a minority majority have less than 50-50 chances of a recession in the next 12 months, 43% of panelists are able to do so during that time, compared to 13% who hold that view. It is highly evaluated. April survey. “
The U.S. has seen 13 months of soaring costs since Biden’s managers called inflation a “transition.”
According to the report, companies also have restrictions on how they use their profits.
Capital investment NRI fell from 40% in the previous quarter to just 22%, and equipment, information and communications technology NRI fell from 47% in the previous quarter to 38%.
Jerome Powell will speak in “Policy Options for Sustainable and Comprehensive Growth.” Nabe Economic Policy Conference held in Washington, DC, USA on March 21, 2022. (Valery Presh / Bloomberg via Getty Images / Getty Images)
Expected capital investment in new or additional structures has declined to zero in recent years, recording 18% in the previous quarter.
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The survey was conducted when US inflation reached 9.1% in June, the highest rate in 41 years. Experts predict that the economy is heading into recession.
The NABE report represents the responses of 58 NABE members surveyed between July 5th and 13th, 2022, reflecting the second quarter of 2022.
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