Better not start spending that big raise you're expecting this year.
Eight of 10 businesses say they expect wage growth adjusted for inflation to remain subdued over the next three years, rising between zero and 3%, according to a quarterly survey by the National Association of Business Economics (NABE) out Monday. That may not sound like much, but it is an improvement over the past few years. Private industry workers' inflation-adjusted wages shrank 0.7% from 2011 through 2013, the Bureau of Labor Statistics' Employment Cost Index shows.
While wages may be nearly flat, companies do see rising non-labor costs.
Thirty-one percent reported rising materials costs over the past three months, the highest percentage in the past year of NABE surveys. Just over 40% of companies expect non-labor costs to grow 5% or less over the next three months.
The number of firms reporting increasing profit margins fell slightly compared with the January survey. A fifth of firms said they charged higher prices in the first quarter from the fourth.
Workers' chances of finding a job are improving. More than 40% of the companies surveyed predict payrolls will grow in the next six months. That's up from 37% in the January and October surveys.
A quarter of them report shortages of skilled labor, the same as in January.
Almost three-quarters of the companies in NABE's survey predict the economy will grow at an annual rate of 2%-3% in the next 12 months. It grew 2.6% in 2013 and 2.0% in 2012.
Seventy-two companies participated in the survey.