Montgomery Businesses Optimistic about Fourth Quarter Confidence among Montgomery metro area business executives remained in positive territory looking ahead to fourth quarter 2013. However, the pace of improvement is expected to slow; at 54.3 ABCI Montgomery is down 2.3 points from last quarter. Firms are more optimistic than a year ago when the area ABCI was 51.3. Hiring could be stronger this quarter and all component index outlooks are positive. Industry sales should pick up moderately in the fourth quarter. Although down 3.1 points, the sales index came in at 57.0. About 44 percent of firms in the survey anticipate higher sales, while 18.6 percent forecast a decrease. Profit growth will be less robust with an index of 52.3; 32.6 percent of panelists expect an increase and 23.3 percent a decline. The hiring index rose 0.5 points to 51.7 and 53.5 percent of businesses indicate no change from third quarter hiring plans. Jobs should increase overall given a net positive of 9.3 percentage points. Area capital investment could be slightly stronger than last quarter; the index fell 5.4 points to a still‐
positive 50.6. About 30 percent of respondents plan to increase spending, while 46.5 percent anticipate no change. Montgomery area firms in professional services and construction are optimistic about all aspects of their industries in the fourth quarter. Businesses in finance, insurance, and real estate see strong prospects for sales and profits, although hiring will be slow. With an index of 50, area manufacturers expect moderate increases in sales and investment, with flat hiring and weaker profits. ABCITM Montgomery 100
Fourth Quarter 2013 Outlook Montgomery Alabama ABCI 54.3
51.9
National Economy 54.1
50.4
Alabama Economy 59.9
56.0
Industry Sales 57.0
54.3
Industry Profits 52.3
51.5
Industry Hiring 51.7
50.8
Capital Expenditures 50.6
48.4
Index above 50 indicates positive outlook. Index below 50 indicates negative outlook. Black increase from previous quarter. Red decrease from previous quarter. Blue no change. Montgomery Metro Area: Business Environment Expectations Q4 2013 compared to Q3 2013 The U.S. and Alabama economies are expected to perform at least moderately better this quarter, with the national economy index coming in at 54.1 and the state index at 59.9. While close to half of Montgomery area panelists think the business environment will be about the same as last quarter, 46.5 percent see the state faring better in the fourth quarter. National Economic Outlook 90
Index
51.2
Remain the Same
70
60
50
34.9
Better
80
54.3
47.2
58.4
53.3
53.1 51.3
13.9
Worse
56.6 54.3
0
44.3
40
10
20
30
40
50
60 50
60
Alabama Economic Outlook 30
46.5
Better
20
48.8
Remain the Same
10
Worse 4.7
0
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2011 2012 2013
Q4
0
10
20
30
Percent 40
Montgomery Metro Area: ABCI Montgomery in Context Industry Performance Expectations Montgomery business confidence slipped 2.3 points in the fourth quarter, a larger drop than the 1.0 point decrease statewide. At 54.3, ABCI Montgomery is 2.4 points above the Alabama ABCI reading of 51.9. Local optimism has now been above confidence statewide for three consecutive quarters. Q4 2013 compared to Q3 2013 Sales 60
44.2
Increase
55
37.2
No Change
18.6
Decrease
0
10
50
20
30
40
50
60
Profits 45
40
35
32.6
Increase
Alabama
30
Montgomery
44.2
No Change
25
23.3
Decrease
0
10
20
30
40
50
60
Q1
Q1
Q1
Q1
Q1
2007 2008 2009 2010 2011
Panelists completed the fourth quarter ABCI survey during the first two weeks of September, amid a climate of con‐
tinuing federal spending cutbacks and uncertainty about budget issues. Still, business confidence indicates at least modest economic expansion statewide and in the Birming‐
ham‐Hoover, Mobile, and Montgomery metros. While the Huntsville area index is flat compared to last quarter, it continues to forecast moderate contraction. 27.9
53.5
No Change
18.6
Decrease
0
10
20
30
40
50
60
Capital Expenditures 51.9
Birmingham‐Hoover
30.2
53.3
Huntsville
46.5
No Change
45.8
Mobile
23.3
Decrease
ABCI by Metro Area Q4 2013 Alabama
Increase
58.0
Montgomery
0
10
20
30
40
50
Hiring Plans Increase
Q1
Q1
2012 2013
60
Percent 54.3
0
10
20
30
40
50
60
The Center for Business and Economic Research would like to thank all Montgomery metro area business executives who completed the fourth quarter 2013 ABCI survey during the first two weeks of September. We look forward to a continuing partnership with the Montgomery Area Chamber of Commerce and encourage you to return for the first quarter 2014 survey December 1‐15. For more details on the Alabama Business Confidence Index™, visit cber.cba.ua.edu/ABCI. Analysis provided by Carolyn Trent, Socioeconomic Analyst. Produced in partnership with the