Companies say profits and wages rise as growth continues

NEW YORK - Sales and profits picked up for companies at the end of last year, and more say they're paying their workers higher wages and salaries in new signs that the U.S. economy continues to improve.

The encouraging signals come from the latest survey from National Association for Business Economics of more than 100 members at companies and industry groups. NABE, a professional association for business economists, academics and others who use economics in the workplace, released its survey on Monday.

After years of recovery following the Great Recession, the U.S. job market and economy have become so healthy that businesses say finding skilled workers is the most difficult it has been in nearly a decade.

The responses fit with recent government reports that show the economy grew at a 2.6 percent annual rate in the last three months of 2017 and the unemployment rate is at a 17-year low. Last quarter's growth was slower than the summer's pace, but economists nevertheless called it solid, and it was the 15th straight quarter that GDP has expanded.

In the survey, 47 percent of respondents said their sales rose over the past three months, up a tick from 46 percent three months earlier. Fewer companies said their sales were falling.

Finding skilled workers, however, has been getting more difficult as the economy heats up. The highest percentage of respondents, 39 percent, said they were facing shortages in skilled labor since July 2008.

Perhaps as a result of that, companies are paying their workers more. Nearly half of the surveys' respondents said their wages and salaries rose over the past three months. None said they cut pay for workers. That difference of 48 percentage points is the strongest reading for the survey since January 2000 and is the third-highest since the NABE began tracking it in 1982.

Bullishness among businesses is tempered, though. Roughly half of the survey's respondents, 51 percent, said they expect sales to increase over the next three months. But that's down from 61 percent three months earlier.

"The results of the January 2018 NABE Business Conditions Survey show widespread sales and profit gains in the fourth quarter of 2017, but also notable increases in materials costs, wages, and shortages of skilled labor," NABE Vice President Kevin Swift, chief economist of the American Chemistry Council, said in a statement.

"The panel's outlook for growth in the overall economy over the next four quarters surpasses the relatively positive assessments of the past few quarterly surveys," Swift said. "Compared to the near-term outlook three months ago, more firms expect increases in the next three months in their firms' profits, employment and capital spending. However, optimism regarding sales in the first quarter of 2018 is less widespread than it has been since 2016."