Sales and profit margins are looking good moving into 2014, according to the latest survey from the National Association of Business Economics.
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The latest reading also paints a strong fourth quarter of 2013.
“Respondents report that strengthened sales growth was more widespread during the last quarter of 2013 than in the third quarter. Profit margins increased at more firms as fewer panelists reported rising materials costs,” NABE President Jack Kleinhenz wrote in the release. More than 40% of survey respondents expect to raise prices in the first quarter of 2014, marking the highest percentage in over a year.
In terms of sales, 63% of survey respondents reported rising sales of goods or services at their firms – an increase of 21% over the third-quarter survey taken in October. Only 9% saw sales drop, which marks a decrease of three points since the previous survey.
Policy Issues Not Top of Mind?
The NABE survey questioned respondents about two ongoing issues – the Affordable Care Act and Federal Reserve monetary policy – and found that neither seemed to be weighing heavily on the respondents.
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When it comes to ObamaCare, 75% said they do not expect the law to materially impact their businesses, though 21% predicted that any impact on their companies would be negative. The Federal Reserve’s decision to scale back its bond-buying program is also not seen as a major threat: 70% say it will have no effect on profitability, and 94% say it will have no effect on capital expenditure plans.
Employment Growth and 2014 Expectations
The dark spot in the January NABE survey is employment. Only 27% of respondents say employment at their companies increased in the fourth quarter, with goods-producing businesses and firms in the finance, insurance and real estate industries showing the most improvement.
Plans to hire also remain ho-hum, with only 37% planning to add staffers in the next six months. This percentage remained unchanged from the previous quarter.
Kleinhenz says he’ll be closely watching the employment numbers next week for a better reading on hiring, but for now the survey is a good sign.
“Profits were good and sales are expected to stay and rise. That’s a great sign for the economy, that demand is there, and consumers are willing to spend,” Kleinhenz told FOXBusiness.com.
The NABE survey polled 64 members from four sectors: Goods-producing; transportation, utilities, information and communications (TUIC); finance, insurance and real estate (FIRE); and services. Fifty-nine percent of the respondents work at companies with fewer than 1,000 employees.