New York — Costs pile up for companies across the US and Israel The war against Iran Many economists see a bleak outlook, as some prepare for a decline in employment and investment in the coming months.
Nearly half of American business economists who responded to a survey by the National Association for Business Economics say the conflict has negatively impacted their operations, according to a report. Released On Monday, most (54%) say they are affected by higher energy prices. More than two-thirds reported a sharp rise in materials expenditures over the past three months, the highest level NABE has seen since July 2022.
The Iranian war, which began with American and Israeli attacks on February 28, has plunged the world into this war. Energy crisis. Crude oil costs continue to rise amid Washington and Tehran Constant confrontation in the Strait of Hormuz – exacerbating rising prices for businesses And families All over the world. As the cost of fuel rises, transportation costs have a greater impact on the daily operations of businesses. Supply disruptions to a range of other essentials, including Fertilizersalso causes increased stress.
Consumers are footing more and more of this bill as companies pass on higher costs to shoppers, beyond the immediate shock Gas pump.
Nearly half of NABE survey respondents (48%) — economists from corporations, trade associations and academia — indicated that their companies were passing on at least some of the cost increases to clients, actually down from 60% in January. But NABE found that a growing number (16%) also expect rates to rise over the next six months, while none are planning to cut rates.
Most respondents say their companies are seeing strong sales now and have stable earnings expectations. That’s in line with what traders are feeling more broadly on Wall Street, where eye-catching earnings have surged from companies ranging from technology to major oil companies. It helped drive the markets to near-record levels recently.
However, only 13% of NABE survey respondents said they expect their earnings to rise in the near future. NABE says this is the lowest share seen since 2023.
Employment and spending could see further impacts soon. Nearly a quarter of NABE survey respondents said they plan to cut back on investment and hiring in the next six months.
“Sales over the past three months have been flat, but material costs have increased and profit margins have declined,” NABE survey chair Martha Moore said in a prepared statement, noting that expectations have “softened” across several indicators, while price expectations continue to accelerate.
Moore, who is also chief economist and managing director of the American Chemistry Council, noted growing recession fears. Half of survey respondents see a more than one in four chance that the United States will fall into a recession within the next year, compared with 44% of respondents who expected such a possibility in January, the National Association for Business Economics found.