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The business environment proved more challenging during Q3 of 2023, according to the October 2023 National Association for Business Economics (NABE) Business Conditions Survey. According to NABE President Ellen Zentner, sales are growing, but at a slower pace, and profit margins are declining.

The Net Rising Index (NRI) for sales during the third quarter is 6. This is down from a reading of 33 in July. This index represents the percentage of panelists who reported rising sales minus the percentage who had falling sales, and it’s reached its lowest reading since April 2020 at the onset of the COVID-19 pandemic. Additionally, the forward-looking NRI is down to 25 from 38 in July. This shows that fewer respondents are expecting sales to rise over the next three months.

The NRI for profit margins declined to -20. This is down 20 points from the July survey, and marks the second-lowest reading since the beginning of the pandemic. Only 10% of panelists expect profit margins to rise in the next three months, down from 22% in July. 

The NRI for prices charged was 27, down from 45 in July, the lowest level since January 2021. Over half (61%) of panelists reported unchanged prices at their firms in the last quarter, up from 47% in July, while one-third reported rising prices at their firms, down from 49%. Over half (60%) of panelists look for prices to stay the same in the next quarter.

More than three-quarters (79%) of respondents feel there is a 50% probability or less that the U.S. economy will enter a recession. This is up from 71% in July, marking continued improvement.