Is a Recession around the corner? NABE survey report says no. In recent years, the US economy has been booming, but many experts predict that a recession may be looming on the horizon. However, the recent National Association for Business Economics survey suggests otherwise.
The NABE surveyed between 4 and 12 April in which 55 responses were accumulated. Julia Coronado, the President of NABE and founder and president, MacroPolicy Perspectives LLC said, “Results of the April 2023 NABE Business Conditions Survey suggest an environment of rising sales and declining profits as rising materials costs and wages continue to bite.”
The U.S. economy is slowing down as fewer panelists report rising employment and capital spending. Carlos Herrera NABE Business Condition Survey Chair and Chief Economist of Coca-Cola North America shared, “The panel’s overall view is that inflation is continuing to ease.
Forty percent of respondents report that prices charged are rising—down from 46% who held this view in the January 2023 survey and 49% from a year ago.
However, the panel believes that there is more work to be done against inflation as the share of panelists expecting prices to rise in the next 3 months moved higher.”
A similar poll was conducted in January and 54% of them believed that a Recession would be here in 12 months. Ken Simonson of NABE says that this optimism can be attributed to the improved sales at their companies.
To put things into context, 46% of the economists surveyed reported that their firm’s sales rose in the past 3 months while 17% mentioned a fall in sales. On the other hand in January 38% reported a rise in sales in their business and 30% reported a fall.
So, is a recession around the corner? NABE survey report says no and here are some of the highlights of the report:
- Net Rising Index for Sales grew from 8 in January to almost 30 in the recent survey. Forward-looking NRI too improved from 5 to 25 which indicates a growth in expectations for sales in the next quarter.
- NRI of -25 from the fourth quarter of 2022 has improved significantly. When we talk about profit margins over the next three months the result is similar to what was seen in January. Almost 60% of respondents don’t see any changes taking place.
- None of the respondents saw their wages fall in the past three months nor does anyone expect them to fall in the next three months.
- The NRI for employment is zero which happens to be the lowest since July to October 2020 report. Back then the figure was negative. A negative NRI for employment indicates an economic downturn.
- 44% of panelists thought there was more than a 50%/ chance of the US seeing a Recession in the next 12 months while 53% people saw a less than 50% chance for the same.