Profit margins set to fall in 2019



Corporate profit margins are projected to decline once the dust settles on fourth-quarter earnings announcements and continue into the first quarter of 2019. Profit margins have been on the rise since the end of 2016 and were up notably in 2018 as the GOP tax bill offered relief to corporate income statements.

Should FactSet’s projections for the first quarter of 2019 hold, it will be the first time margins have declined on a year-over-year basis since Q4 2016, when the figure fell to 9.9% from 10%. This year’s decline would be more significant, as margins would fall to 10.8% from 11.6% in Q1 2018.

Among the most affected industries would be information technology (20.1% from 22.3%), communications (11.3% from 13.2%) and materials (9.1% from 10.6%).

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