NEW YORK — Nearly half of American business economists who responded to a survey by the National Association for Business Economics said the conflict with Iran has negatively impacted their operations. The survey found that rising energy and material costs are prompting firms to pass on price increases and scale back investment plans.

The Iran war began with U.S. and Israeli attacks on Feb. 28. Crude oil costs have continued to rise during the standoff between Washington and Tehran over the Strait of Hormuz.

Of those surveyed, 54% said they had been affected by rising energy prices. Transportation costs have increased as fuel prices have climbed, and supply disruptions for necessities, including fertilizer, have added to business expenses. More than two-thirds of respondents reported steeper material expenses over the last three months, the highest level the association has recorded since July 2022.

"Sales over the past three months were steady, but materials costs increased and profit margins declined," said Martha Moore, chair of the survey and chief economist and managing director at the American Chemistry Council. Nearly half of respondents, 48%, indicated their firms were passing on at least some cost increases to customers, down from 60% in January. Sixteen percent expect to raise prices over the next six months, and none of the respondents plan to lower prices.

Most respondents said their firms were seeing strong sales and had stable profit outlooks. However, only 13% said they expect their profits to rise in the near future, the lowest share since 2023. Nearly a quarter said they plan to scale back investment and hiring in the next six months.

Half of the respondents see a more than one-in-four chance the U.S. falls into a recession within the next year, up from 44% who projected such a likelihood in January.