Business Conditions Survey

January 2023

NABE Survey Panel Suggests Probability of 2023 Recession Remains Elevated; Continued Wage Growth and Weaker Sales to Put Pressure on Profit Margins


The January 2023 NABE Business Conditions Survey report presents the responses of 60 NABE members to a survey conducted January 4-11, 2023, on business conditions in their firms or industries, and reflects fourth-quarter 2022 results and the near-term outlook.

COMMENTS: The results of the January 2023 NABE Business Conditions Survey indicate widespread concern about entering a recession this year,” said NABE President Julia Coronado, founder and president, MacroPolicy Perspectives LLC. “For the first time since 2020, more respondents expect falling rather than increased employment at their firms in the next three months. Fewer respondents than in recent years expect their firms' capital spending to increase in the same period.”

“The survey results reveal an unevenness across indicators,” added NABE Business Conditions Survey Chair Carlos Herrera, chief economist, Coca-Cola North America. “Wages rose at a majority of respondents’ firms in the last three months of 2022 and more firms added workers than reduced headcounts. But far more firms than in the past three years reported falling profit margins.

“The panel suggests that inflation may be easing with the outlook for prices charged at its lowest reading since the October 2020 survey, overall,” continued Herrera. “Materials costs have drifted down significantly since last July, and more respondents expect falling costs in the next three months.”



  • Slightly more than half of respondents put the possibility of a recession over the next year at 50% or higher. Respondents report the biggest downside risks to their outlooks are higher interest rates and costs, while the biggest potential upside risks are lower interest rates and costs, as well as increased labor force participation and improved supply chains. 
  • Sixty-three percent of respondents report rising wages over the past three months, unchanged from the October 2022 survey. The NRI increased from 55 in October to 63 in January 2023, as the share of respondents reporting falling wages fell to zero. The NRI for expected wage costs in the next three months is also 63, up from 43 in the October survey. 
  • Sales growth in the fourth quarter of 2022 was relatively unchanged from the previous quarter. The Net Rising Index (NRI) for sales—the percentage of panelists reporting rising sales minus the percentage reporting falling sales—in the fourth quarter of 2022 (Q4 2022) is 8, unchanged from the October 2022 survey. This is the lowest NRI for sales growth since the negative reading during the pandemic in the first half of 2020. The forward-looking NRI fell to 5 from 20 in the October survey, indicating weaker expectations for sales over the next quarter. 
  • Profit margins remain under pressure, registering a -25 NRI in the January 2023 survey, down from -10 in the October 2022 survey. This marks a return to levels last reported in mid-2020 surveys. The outlook for profit margins over the next three months is higher, with an NRI of -7, up from -17 in October. 


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