NABE Business Conditions Survey

January 2018 

Sales and Profits Improve in Fourth Quarter of 2017; NABE Panel Looks for Wage and Job Gains in Early 2018

NOTE: This is a summary of the survey.  NABE Members can download the full report here

The January 2018 NABE Business Conditions Survey report presents the responses of 119 NABE members to a survey on business conditions in their firms or industries conducted between December 26, 2017, and January 10, 2018, and reflects fourth-quarter results and the near-term outlook. 

COMMENTS: “The results of the January 2018 NABE Business Conditions Survey show widespread sales and profit gains in the fourth quarter of 2017, but also notable increases in materials costs, wages, and shortages of skilled labor,” said NABE Vice President Kevin Swift, CBE, chief economist, American Chemistry Council. “The panel’s outlook for growth in the overall economy over the next four quarters surpasses the relatively positive assessments of the past few quarterly surveys. Compared to the near-term outlook three months ago, more firms expect increases in the next three months in their firms’ profits, employment and capital spending. However, optimism regarding sales in the first quarter of 2018 is less widespread than it has been since 2016. 

“More respondents report that their firms are hiring—and having trouble filling positions—than in the October survey,” added Swift. “Looking at 2018 as a whole, 63% of respondents expect their firms to increase sales, and three times as many expect hiring to increase rather than decrease.” 


  • A larger share of panelists participating in the January 2018 NABE Business Conditions Survey indicates that sales at their firms rose in the fourth quarter of 2017 compared to the share that reports declines. Forty-seven percent of respondents report gains, similar to the share that reported sales increases in the October survey. The Net Rising Index (NRI)—the percentage of panelists reporting rising sales minus the percentage reporting falling sales—increased from 24 in the third quarter to 30 in the fourth quarter, as the share of respondents reporting falling sales at their firms decreased to 17%.
  • Optimism regarding future sales declined. Fifty-one percent of survey respondents expect sales to increase over the next three months, the lowest such share since the July 2016 survey. Conversely, the percentage expecting their firms’ sales to decrease in the next three months climbed to 15%, and the NRI for expected sales is 36—the lowest reading since April 2016.
  • Profit margins gained momentum in the fourth quarter, reversing the decline reported in the previous survey. Just over one-third of respondents report rising profit margins, and the NRI of 23 is the highest index reading since January 2015. Respondents from all sectors report stronger profit margins than in the previous survey. The NRI for expected profits over the next three months also increased.
  • The NRI for wages and salaries rose from 37 in October to 48 in the January survey—the highest index reading since the January 2000 survey, and the third highest since NABE began analyzing the data in April 1982. Wage increases are likely to be even more widespread over the next three months, as the NRI for expected wage costs increased from 46 in the October survey to 58 in January—the highest level since this question was added to the survey in April 2014. 
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