The probability of a recession has dropped below 50%, according to a survey by the National Association for Business Economics (NABE) of 57 members. The outlook reflects the fourth quarter of 2023 and the near-term future.
About 91% of the respondents give the chance of a recession at 50% or less. This is part of an ongoing development of other economists walking back recession expectations.
"The January 2024 Business Conditions Survey results suggest broad improvement, with respondents reporting rising sales, profit margins, and capital spending, while supply chains are improving," said NABE President Ellen Zentner, chief U.S. economist, Morgan Stanley, in prepared remarks.
That said, the "path forward is not clear," added NABE Business Conditions Survey Chair Carlos Herrera, chief economist at Coca-Cola North America, even though inflation continues to moderate. "Seventy-two percent of panelists report that their firms are passing all or some of their cost increases on to customers, and wages and material costs are expected to rise."
The business conditions seem to be improving. NABE frequently looks at net rising indexes, meaning the percentage noting improving conditions minus the percentage reporting deteriorating conditions. The number in January was 37, up from 6 in October. "More panelists than in the previous survey also expect sales to rise in the next three months," the report said. The forward-looking NRI increased from 25 in the October survey to 61—the highest reading since July 2021, as well as one of the highest readings on record."
Responses could vary significantly by one of four categories the group uses. The highest NRI came from transportation, utilities, information, and communications (TUIC), at 67. Services saw 42; goods-producing, 33; and finance, insurance, and real estate (FIRE), 19.
Expectations of the next three months were an NRI of 61, the largest score for at least the last 12 months. TUIC was at 83; services, 77; goods-producing, 67; and FIRE, 25.
Other signs of improving business: profit margins NRI moving into the positive for the first time since April 2022; better number of those reporting lower prices; lower materials costs; fewer panelists reporting falling employment; higher capital spending; more reporting no shortages of anything they needed; an improved 51% not reporting labor shortages; and improved credit conditions.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more information visit Asset & Logo Licensing.
