Businesses are seeing continued sales growth, and most are confident that we won’t experience a recession in the U.S., according to the latest Business Conditions Survey from the National Association for Business Economics (NABE).
The Net Rising Index (NRI) for sales (percentage of rising sales minus falling sales) increased from 30 in last quarter’s survey to 33 in Q2. And NABE members anticipate more growth over the next three months — the forward-looking NRI went up from 25 to 38.
Other notable survey findings include:
- After four consecutive quarters of negative readings, the NRI for profit margins rose to 0, up from -8 in the first quarter. Respondents also have a positive outlook for the next few months, with the forward-looking NRI increasing to 6 from -6.
- The NRI for materials costs fell from 50 to 43 in Q2, well below its record high of 76 in July 2022, as more respondents reported falling material costs (13%, up from 7%) and fewer reported increasing costs (55%, down from 57%). The percentage of panelists who expect declining costs in the months to come jumped to 23%, up from 7%.
- More than half (53%) of survey participants said their wages didn’t change in the second quarter, which hasn’t occurred since 2021, and the share of those reporting rising wages fell from 63% to 47%.
- Prices charged reached the third highest reading in the survey’s history, jumping to 45 in Q2 from 34 in Q1. Nearly half of survey participants reported that they increased their prices in the second quarter, up from 40% in the previous quarter.
The positive results in Q2 have many NABE members feeling optimistic about the year ahead. Most (71%) panelists said the likelihood of a U.S. recession within the next year is low (50% chance or less).
