NEW YORK (AP) — Rising costs for materials and labor
appear to be pressuring businesses, according to a quarterly survey from
the National Association of Business Economics.
During the first
quarter of the year, 31 percent of businesses surveyed reported higher
material costs, more than double the 15 percent that saw costs rise in
the previous survey. Additionally, 35 percent reported rising wages and
salaries at their businesses in the past three months, up from 23
percent in January.
Yet those who said they raised the prices they
charge in the past three months remained unchanged at 20 percent,
according to the latest NABE survey of 72 members, which was conducted
between March 18 and April 1.
"It appears that businesses were not
able to pass on costs increases, resulting in increased pressure on
margins," the survey findings said.
The quarterly survey by NABE
is intended to gauge business conditions at members’ firms or
industries. The April survey reflects first quarter results, as well as
the near-term outlook.
Despite the cost pressures, businesses seem
more upbeat about the direction of the broader economy. The survey
found that 80 percent said they expect the GDP to rise at least 2
percent over the next year. Nearly three-quarters also said they expect
labor market conditions to improve, with unemployment easing to between 5
percent and 6 percent in the next one to three years. And over the next
six months, 43 percent of respondents expect their firms to expand
employment.
Still, a majority expect wage growth to remain subdued, with growth of up to 3 percent over the next
three years.
The
number of businesses that reported rising sales in the first quarter
fell to 53 percent, down from 63 percent in the previous quarter. Jack
Kleinhenz, president of NABE and chief economist at the National Retail
Federation attributed the decline to "a very rough winter" in a
statement.
Capital spending rose for 38 percent of respondents, up
from 28 percent in January. Meanwhile, those reporting rising profit
margins during the period declined slightly to 32 percent, from 34
percent in the previous survey.
Looking ahead to the coming
quarter, 41 percent said they expect costs to increase up to 5 percent.
Whether they’ll be able to pass that on to customers is uncertain; 31
percent said they expect their businesses to raise prices. That’s down
from the 43 percent who said they planned to raise prices in January,
but still an elevated level from most of last year.
Copyright 2014 The Associated Press. All rights
reserved. This material may not be published, broadcast, rewritten or
redistributed.