Sales growth slowed dramatically in Q3, according to the latest Business Conditions Survey from the National Association for Business Economics (NABE), and almost two-thirds of surveyed NABE members said a recession is near or already here.

only about a third of respondents reported sales growth during the quarter, well below the two-thirds whose sales rose at the end of last year. The Net Rising Index (NRI) for sales dropped down to 8, the lowest it’s been since the middle of 2020. Also for the first time since mid-2020, more members reported declining profit margins than rising ones.

As inflation continues to drive up costs, nearly 70% of respondents said their businesses are passing on at least some of their cost increases to consumers. More than half (52%) increased the prices they charge in Q3, up 9% compared to the previous quarter. Meanwhile, labor and material shortages persisted, with many respondents reporting shortages in skilled labor (45%), unskilled labor (24%), intermediate inputs (22%), and raw materials (16%). 

More than half (53%) of respondents said there’s a “more-than-even likelihood” of a U.S. recession within the next year, while 11% believe the country is already in a recession.