Full Breakdown
Iran War Spurs U.S. Business Costs
5/13/2026, 12:12:29 AM
Conflict Overview and Energy Shock
U.S. and Israeli strikes on Iran began on Feb. 28, 2026, sparking a standoff in the Strait of Hormuz that lifted crude oil prices. Higher fuel costs have raised transportation expenses, and fertilizer and other input disruptions have added to operating pressures.
Survey Highlights Rising Expenses
A National Association for Business Economics (NABE) poll of business economists, trade-association analysts and academics shows the war’s financial ripple. Fifty-four percent report direct impacts from rising energy prices, and more than two-thirds note steeper material costs—the sharpest rise since July 2022. Forty-eight percent of firms have passed some cost hikes to customers, down from 60 % in January, while 16 % anticipate raising prices within six months. Only 13 % expect profit growth, the lowest share since 2023. About a quarter plan to curb hiring and investment over the next half-year.
Official Summary from NABE
Martha Moore, chair of the NABE survey and chief economist at the American Chemistry Council, said steady sales have been offset by higher material costs and shrinking profit margins. She added that outlooks have softened across several indicators and inflationary pressures are accelerating, prompting firms to reconsider expansion plans.
Recession Concerns
Economists flagged heightened recession risk. Half of the surveyed economists now see a greater than 25 % chance the United States will enter a recession within a year, up from 44 % in the prior month. The consensus links elevated input costs to weaker corporate earnings and reduced consumer spending.
Implications for Hiring, Investment, and Prices
Rising energy and material expenses combined with recession anxiety suggest tighter corporate budgets. Companies are likely to delay capital projects and limit workforce growth, potentially dampening broader economic momentum. While many firms have held prices steady, the intent to raise prices may further strain household budgets and suppress demand.
Verbatim Quotes
- “and Israel's war against Iran — and many economists see a bleak outlook, with some bracing for a downturn in hiring and investment in the coming months.” — ABC News
- “More than two-thirds reported steeper material expenses over the last three months, the highest level NABE has seen since July 2022.” — ABC News
- “falls into a recession within the next year, up from 44% of respondents who projected such a likelihood in January, NABE found.” — ABC News
- “Sales over the past three months were steady, but materials costs increased and profit margins declined,” — Martha Moore, chair of the NABE’s survey
Outlook and Upcoming Trends
NABE projects that inflationary pressure will persist while the conflict continues, making price adjustments more likely in the next six months. Monitoring hiring plans and capital spending will be essential to gauge whether the economy can avoid a broader slowdown.
