New NABE Survey Shows Business Activity Increasing at Its Fastest Pace in a Year in the First Quarter of 2013


The July 2013 NABE Industry Survey report presents the responses of 65 NABE members to a survey conducted between June 18 and July 2, 2013, on business conditions in their firm or industry and reflects second-quarter 2013 results and the near-term outlook.

COMMENTS: “Results from NABE’s July 2013 Industry Survey indicate that sales continued to advance in the second quarter of 2013, although at a slower pace than at any time in the past year,” said Timothy Gill, Chair of the NABE Industry Survey Committee and Vice President of Business Information & Statistics at The Aluminum Association. “Over one-third of survey respondents indicate that sales rose at their firms in the April-to-June period, more than double the percentage reporting a sales decline. Still, a higher share had reported rising sales and a lower share had reported falling sales in the first quarter of 2013, possibly reflecting increased headwinds from a weak global economic environment and tighter domestic fiscal policy in the latest period. Nonetheless, the survey results point to a stepped-up rate of employment growth in the last three months as the proportion of respondents indicating payrolls rose at their firms in the last quarter outpaced the share reporting declining payrolls by the widest margin since the fourth quarter of 2011. Meanwhile, capital spending momentum slipped slightly while profit margins contracted on balance for the first time in 4 years amid evidence of stable materials cost inflation but slower growth in prices charged.

“Despite mixed signals regarding second-quarter business conditions, NABE’s industry survey panel remains upbeat about the future. The forecast for economic growth improved for a third straight quarter, with more than 70% of respondents indicating they are now anticipating real GDP growth will exceed 2% in the next twelve months, up from 65% that forecast such growth in the previous survey. Expectations for business investment also strengthened in July, and the employment outlook remains close to a two-year high. As was the case in the April 2013 Industry Survey, the state of the global economy, the possibility of further government spending cuts and a challenging regulatory environment are among the top concerns of the panel in terms of their firms’ nearterm prospects. At the same time, a significantly higher proportion of respondents than in April cite rising interest rates as their greatest concern moving forward. Consequently, optimism remains guarded, with only one respondent expecting real GDP to expand faster than the economy’s long-run trend growth of 3% in the second half of 2013 and the first half of 2014.”


  • Sales growth decelerated during the second quarter of 2013 as the net rising index (NRI)—the percentage of panelists that reported rising unit demand minus the percentage that reported falling demand—declined to 20. The measure had jumped to 47 the previous quarter after holding steady at 22 throughout the second half of 2012. Just over a third of respondents—35%—reported rising sales at their firms, down from 55% in April and only slightly below percentages seen the three previous quarters. Meanwhile, 15% of panelists reported falling sales, up from 9% in the previous survey but equal to the share reported in January 2013.
  • Profit margins eroded in the second quarter of 2013. The percentage of panelists reporting rising margins dropped to 21% in July from 29% in April, while the percentage reporting falling margins climbed to 25% in the current survey from 13% in April. As a result, the NRI slipped into negative territory for the first time since 2009 at -3.
  • Payroll gains picked up in the second quarter after holding largely steady in the first, with the NRI increasing to 18 from 10 in the previous survey. Nearly three of every ten panelists reported that employment rose at their firms, up from the 22 in the first quarter. The share indicating that employment fell was nearly unchanged at 11%.
  • The NRI for the employment outlook was essentially stable, dipping to 31 from 32 the previous quarter and remaining close to a nearly two-year high. Thirty-nine percent of survey respondents currently expect employment at their firms to increase over the next six months (nearly identical to the 40% who held this view in April) compared to only 8% who expect it to decline (close to the 9% in April). Only 3% expect a decrease in payrolls through significant layoffs, in line with results over the last year.
The rest of the NABE Industry Survey July 2013   is for NABE members only.

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