Birmingham‐Hoover business executives see slightly more upside for hiring and investment in the fourth quarter but weaker growth in sales and profits. The area ABCI remains positive at 53.3, down 1.1 points from its third quarter reading. Panelists are more confident than a year ago when ABCI Birmingham‐Hoover was 49.7. Sales should be steady or improving at most area firms. The sales index registered 55.2, with 41.4 percent of panelists forecasting no change from last quarter and a net 20.7 per‐
cent expecting an increase. Around 62 percent of executives feel profits will be about the same this quarter, while 24.1 percent anticipate an increase. After a strong third quarter reading, the profits index is down 4.9 points to 52.6. The hiring plans index increased again this quarter, rising 0.5 points to 52.6. About 76 percent of area panelists expect no change in hiring compared to the third quarter and a net 10.3 percent forecast an increase. Capital spending should be stable at about 64 percent of area firms, while 22.4 percent plan to boost expenditures in the fourth quarter. Birmingham‐Hoover respondents in construction are upbeat about all aspects of their business this quarter, while businesses in transportation, information, and utilities foresee strong gains in hiring and capital investment. Job growth should also pick up in manufacturing, professional services, and other services. While forecasting improved sales and profits, the area’s financial activities sector sees hiring and capital spending weakening in the fourth quarter. ABCITM Birmingham‐Hoover 100
Optimism Continues in Birmingham‐Hoover Metro Area Fourth Quarter 2013 Outlook Alabama Birmingham‐
Hoover
ABCI 53.3
51.9
National Economy 50.0
50.4
Alabama Economy 57.3
56.0
Industry Sales 55.2
54.3
Industry Profits 52.6
51.5
Industry Hiring 52.6
50.8
Capital Expenditures 52.2
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. Birmingham‐Hoover Metro Area: Business Environment Expectations Q4 2013 compared to Q3 2013 On average, Birmingham‐Hoover executives expect the U.S. economy to perform about the same as in the third quarter; the index is down 2.5 points to a neutral 50. Alabama’s economic growth is forecasted to accelerate in the fourth quarter, with the state index up 4.4 points to 57.3. National Economic Outlook 90
Index
44.8
Remain the Same
70
60
50
29.3
Better
80
45.1
52.7
57.6
52.8
52.7 54.4 53.3
49.7 50.7
25.9
Worse
0
10
20
30
40
50
Alabama Economic Outlook 40
30
37.9
Better
20
53.5
Remain the Same
10
8.6
Worse
0
Q4 Q1 Q2
Q3 Q4 Q1 Q2
Q3
2011 2012 2013
Q4
0
10
20
30
Percent 40
50
Birmingham‐Hoover Metro Area: Industry Performance Expectations Birmingham‐Hoover area business confidence remained positive at 53.3 on the fourth quarter 2013 ABCI survey and came in above the statewide ABCI for the fifth consecutive quarter. A decline of 1.1 points in ABCI Birmingham‐Hoover this quarter is about the same as the 1.0 point decrease statewide. Area confidence lags the post‐recession peak of 57.6 seen in the second quarter of 2012. ABCI Birmingham‐Hoover in Context Q4 2013 compared to Q3 2013 Sales 39.7
Increase
60
41.4
No Change
55
19.0
Decrease
0
50
20
40
60
80
45
40
Profits 35
24.1
Increase
30
62.1
No Change
25
13.8
Decrease
0
20
40
60
80
Hiring Plans 17.2
Increase
75.9
No Change
6.9
Decrease
0
Alabama
Birmingham‐Hoover
20
40
60
80
Q1
Q1
Q1
Q1
Q1
Q1
2007 2008 2009 2010 2011 2012
Q1
2013 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. ABCI by Metro Area Q4 2013 Capital Expenditures Alabama
22.4
Increase
Birmingham‐Hoover
63.8
No Change
0
53.3
Huntsville
13.8
Decrease
51.9
45.8
Mobile
20
40
60
80 58.0
Montgomery
54.3
Percent 0
10
20
30
40
50
60
The Center for Business and Economic Research would like to thank all Birmingham‐Hoover 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 Birmingham Business Alliance 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