Business Conditions Survey

January 2025

NABE Panelists Report Steady Sales and Profit Margins Amid Rising Costs and Policy Uncertainty

The January 2025 NABE Business Conditions Survey report presents the responses of 70 NABE members to a survey conducted December 30, 2024-January 13, 2025, on business conditions in their firms or industries, and reflects fourth-quarter 2024 results and the near-term outlook.

COMMENTS: “The January 2025 NABE Business Conditions Survey results reveal that business conditions remained relatively unchanged through the end of 2024, although a larger share of respondents than in the previous survey foresees higher prices going forward,” said NABE President Emily Kolinski Morris, CBE, global chief economist, Ford Motor Company. “At the same time, the odds of a recession continue to diminish according to panelists, with the downside risks largely tied to uncertainty over the implementation and timing of policy proposals from the new administration.”

“The survey results suggest a steady-state economy,” added NABE Business Conditions Survey Chair Selma Hepp, chief economist and senior vice president, CoreLogic. “However, concerns remain regarding shortages of skilled labor and a potential for more price pressures ahead. In addition, the outcome of the recent U.S. elections did not change hiring or investment plans for 70% of respondents.”

HIGHLIGHTS

• Sixty-two percent of respondents report no change in prices, and 30% report higher prices—the smallest share since January 2021. A majority of respondents expects prices to hold steady in the next three months (65%) and 35% anticipate price increases, higher than 28% reported in the October survey.
• Respondents place very low odds on the U.S. entering a recession over the next 12 months. Most respondents (82%) put the probability of a U.S. recession at 25% or lower.
• Uncertainty over the implementation and timing of policy proposals from the new administration is the most-frequently cited downside risk to respondents’ company outlooks (61% of respondents). Increased global geopolitical instability remains a significant risk (36%).
• While more than half of respondents report no shortages, skilled labor remains the most-often cited input where shortages persist. Shortage of unskilled labor is cited by fewer respondents than in the previous survey.