Q4 NABE Survey Projects Slowing Sales and Persistent Profit Margin Pressure

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Q4 NABE Survey Projects Slowing Sales and Persistent Profit Margin Pressure

Source：Food Industry Executive

Publish time：2023-02-01

After a stagnant Q4, surveyed members of the National Association for Business Economics (NABE) are anticipating weakening sales growth this quarter, according to the latest Business Conditions Survey.

Sales growth was unchanged from Q3 to Q4 and is expected to fall — the Net Rising Index (NRI) for sales remained at 8 in Q4 and the forward-looking NRI dropped from 20 to 5. The NRI for profit margins for Q4 dropped from -10 to -25, returning to levels recorded in the middle of 2020. But the profit margins outlook for this quarter shows improvement, up from -17 to -7.

There’s also potential for softening inflation — the outlook for prices charged dropped to its lowest reading since the October 2020 survey.

In addition, it’s the first time since 2020 that members are forecasting decreases rather than increases in employment over the next three months. Yet, in Q4 of 2022, there were more companies that added workers than those that reduced their employment. Most surveyed companies (63%) also raised wages over the last quarter.

A little more than half of respondents said there’s a 50% or higher chance of a recession within the next year.

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