The April 2011 NABE Industry Survey report presents theresponses of 72 NABE members to a survey conducted between March16, 2011, and March 31, 2011, on business conditions in their firmor industry and reflects first-quarter 2011 results and thenear-term outlook.

“NABE's April 2011 Industry Survey makes clear that despitegeopolitical concerns, higher oil prices, and uncertainties createdby the disasters in Japan, the economy continues to recover,” saidShawn DuBravac, Consumer Electronics Association.”Job creation inthe quarter, as well as the outlook for the next six months asmeasured by the number of firms increasing headcount, is strongerthan we've seen in the entire survey history dating back to 1982.Supporting this growth, both recent results and the outlook forsales and profit margins continue to improve. Companies appear tobe positioning themselves for a firming economic environment byincreasing capital expenditures. At the same time, risks remainpresent. NABE survey respondents view the Japanese disasters as anet negative. The survey findings reflect early signs ofinflationary pressure as more firms raised prices last quarter andalso expect to raise them in the coming quarter.”

HIGHLIGHTS

• The number of firms reporting rising employment relative todeclining employment increased to a new high since the inception ofthe NABE Industry Survey in 1982. This follows on the heels of theprevious quarter's increase. The outlook for employment alsocontinues to improve–moving up slightly from the previous quarterand setting another record level. No survey respondents expectemployment to decline in the next six months at their firms becauseof significant layoffs.
• Sales increased for a third consecutive quarter, with 63% ofApril survey respondents reporting higher sales than lastquarter–the largest percentage since 1994. Only 9% reported a dropin sales. All four major industry sectors experienced strong demandgrowth.
• Expectations for economic growth in 2011 improved compared tothose reported in the previous survey, with 94% of panelists nowforecasting that real GDP will increase by more than 2%. A sizableproportion of panelists–nearly 40% –expect real GDP growth inexcess of 3%.
• At the same time, panelists anticipate that political turmoilin North Africa and the Middle East, and the earthquake in Japan,will cause inputs costs to rise, lower their firm's sales, andexert downward pressure on U.S. economic growth in 2011.
• Profit margins continued to improve. Forty-five percent ofsurvey respondents reported increased profitability, versus 15% whoreported declines last quarter–the largest net positive responsesince 1983. Two of the four sectors (services and goods-producing)reported increases in profitability versus last quarter.
• The share of respondents whose firms increased capital spendingover the prior quarter held steady from the previous survey at 38%.The share indicating their firms decreased capital spending fell toits lowest level since the survey began in 1982, at only 3%.Expectations for future capital spending deteriorated following asizable improvement in the previous quarter, but positive responsesstill exceeded negative ones by 53% to 10%. Expectations remainedpositive for future spending on both computers and communicationsequipment and on structures.
• The April 2011 NABE Industry Survey results reflect buildinginflationary pressure in the U.S. economy. The survey recorded thehighest percentage of respondents (35%) reporting an increase inpricing since the October 2008 survey. Price increases wereespecially prevalent in the goods-producing sector. Materials costsalso continued to rise, with more respondents in all four sectorsreporting that costs rose last quarter. The percentage ofrespondents reporting rising labor costs has jumped from 16% in theJanuary 2011 survey to 35% in this survey. Expectations for futureselling-price hikes and non-labor input costs also increased.
• A series of special questions related to the disaster andrecovery efforts in Japan found the quantifiable impact will besmall for both the short and long-term, so uncertainty does existamong the respondents.

NABEis the premier professional association for business economists andthose who use economics in the workplace. Since 1959, NABE hasattracted the brightest minds and the most prominent figures ineconomics, business, and academia to its membership withhighly-regarded conferences, educational and career developmentofferings, industry surveys, and its unrivaled networkingopportunities. The NABE membership is organized intosubject-oriented Roundtables including: Corporate Planning,Financial, Health Economics, International,Manufacturing/Industry,Small Business/Entrepreneurship, RealEstate/Construction, Regional/Utility, Technology and TransferPricing. Past presidents of NABE include former Chairman of theBoard of Governors for the Federal Reserve System, Alan Greenspan,several former Federal Reserve Governors, and other senior businessleaders.

NABE's mission is to provide leadership in the use andunderstanding of economics.