BLCI
Current Quarter vs. Previous Quarter
100
80
Index
Alabama
Business
Leaders
Confidence
Index:
60
63
60
56
58
56
40
2nd Quarter 2003
20
Alabama business leaders completed
the second quarter 2003 survey in
0
the shadow of war with Iraq, with
Q2 Q3
the war’s duration and outcome
2002
unknown when the survey closed at
the end of March. Geopolitical uncertainties combined
with general economic weakness to depress expectations
for near-term improvement in the economy. The confidence index registered 56 for the quarter, indicating modest overall improvement, but at a slower pace than expected in the first quarter when the reading was 58.
Expectations for the course of the U.S. economy dipped—
51.3 percent of panelists anticipate improvement in the
national economy in the second quarter compared to
almost 60 percent last quarter. And, the 22.4 percent of
respondents forecasting a downturn is the highest negative
of the past year. Faced with the state’s current fiscal crisis
and expected budget shortfall, business leaders are also less
positive about the direction of the Alabama economy in
second quarter 2003. Just 43 percent forecast improvement, down from 49 percent last quarter, for the lowest
expectation of the past year. And 30 percent think the
The University of Alabama
Center for Business and Economic Research
Box 870221
Tuscaloosa, Alabama 35487-0221
Q4 Q1 Q2
2003
shortfall will significantly impact their
industry.
Increased sales and an improved job
outlook are expected to be the
strongest contributors to growth in
the Alabama economy in the second
quarter. About 59 percent of panelists expect sales in their industry to
increase during the quarter, up from
55.4 percent on the first quarter survey. Sales growth should be strongest
in construction and manufacturing.
The 30.7 percent of respondents forecasting increased hiring during the
quarter provides the most optimistic
jobs outlook of the past year.
Construction, manufacturing, and
FIRE are expected to be the strongest
sectors for job growth.
On the negative side, forecasts for profits and capital
expenditures both fell in the second quarter. Just 46.6 percent of Alabama business leaders expect profits in their
industry to rise, down from 51.3 percent last quarter.
Profit outlooks are most positive in construction and
TCPU. And capital spending is not likely to rebound during the second quarter, as only 37.5 percent of panelists
expect expenditures in their industry to increase—a significant drop from 44.2 percent last quarter. Still, about 50
percent of respondents in construction and FIRE foresee
increases.
Carolyn Trent
The BLCI is developed in partnership between
Compass Bank and the Center for Business and
Economic Research. Complete results can be found
at blcindex.cba.ua.edu.