TM
BIRMINGHAM - HOOVER
Alabama Business Confidence Index | Center for Business and Economic Research | The University of Alabama
Area Business Confidence Wanes as 2015
Continues
Birmingham-Hoover business executives remain optimistic
about their prospects in the third quarter of 2015. The area
ABCI lost less than a point to land at 53.1, Still, this is 3.8
points lower than a year ago, indicating a slower expansion.
Every industry indicator decreased this quarter, except capital expenditures. The sales index fell 2.7 points
to a still optimistic 55.8. Just over 81 percent of panelists
expect sales to increase or remain the same compared to
the second quarter, while less than 19 percent forecast a
decrease. Profits at area firms should generally be stable
or improving, even as the index declined 2.8 points to 51.7.
About 74 percent anticipate steady or higher earnings and
26 percent feel profits will be below last quarter’s level.
Job creation may decline slightly in the third quarter; the index fell 0.3 points to 51.2. While 88 percent of
Birmingham-Hoover executives plan to hire at at the same
pace as last quarter, 12 percent forecast a decrease in
hiring. A 2.3 point gain puts the capital investment index
at 55.8—93 percent of panelists expect spending to be at
least as high as last quarter, while only seven percent anticipate a decrease.
Area construction and professional services businesses
are the most positive, with indexes near or greater than 60.
Retail trade and manufacturing concerns fell below the 50
point level this quarter.
ABCITM Birmingham-Hoover
90 53.1
54.8
48.8
50.7
Alabama Economy
55.2
56.6
Industry Sales
55.8
58.3
Industry Profits
51.7
55.7
Industry Hiring
51.2
53.9
Capital Expenditures
55.8
53.2
Index above 50 indicates positive outlook.
Index below 50 indicates negative outlook.
Black values indicate an increase from previous quarter.
Red values indicate an decrease from previous quarter.
Blue values indicate no change.
Birmingham-Hoover Metro Area:
Business Environment Expectations
Q3 2015 compared to Q2 2015
Executives in the Birmingham-Hoover metro area are
less optimistic about the national business environment
this quarter. Expectations for the U.S. economy fell 1.2
points to 48.8. However, the Alabama economy index
gained almost one point to 55.2.
Over 90 percent of panelists expect the same or
stronger growth in the state’s economy and almost 70
percent forecast the same or better performance at the
national level compared to last quarter.
54.4 53.3 53.2 57.0 56.9 53.9 58.1 53.8 53.1 46.5 30.2 Worse 50 0 10 20 Percent
30 40 50 Alabama Economic Outlook
40 30 30.2 Be5er 20 60.5 No Change 10 0 23.3 No Change 70 Alabama
ABCI
National Economy
Be4er 80 Percent BirminghamHoover
National Economic Outlook
100 60 Third Quarter 2015 Outlook
Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2014 2015 Q2 Q3 9.3 Worse 0 Percent
10 20 30 40 50 60 Center for Business and Economic Research, Culverhouse College of Commerce, The University of Alabama | 1
ALABAMA BUSINESS CONFIDENCE INDEX
Birmingham-Hoover Metro Area
Birmingham-Hoover Metro Area:
ABCI Birmingham-Hoover in Context
Industry Performance Expectations
Birmingham-Hoover business confidence dropped 0.7
points to 53.1 on the third quarter 2015 survey. This is 3.8
points below the reading of one year ago. Nonetheless,
area executives have now felt optimistic, as evidenced by
an ABCI above 50, for eleven consecutive quarters.
Q3 2015 compared to Q2 2015
Sales
60 39.5 Increase 55 41.9 No Change 50 18.6 Decrease 0 5 10 15 20 25 Percent
30 35 40 45 Profits
45 50 40 35 30.2 Increase 30 44.2 No Change 25.6 Decrease 0 5 10 15 20 25 Percent
30 35 Hiring Plans
14.0 Increase No Change 11.6 Decrease 0 10 20 30 40 Percent
50 60 25 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2007 2008 2009 2010 2011 2012 2013 2014 2015 sentiment in Alabama’s four largest metro areas
45 Business
50 is solidly positive in the third quarter of 2015. All industry component indexes in each area are at or above 50,
indicating broad improvement. ABCI Montgomery came
in on top, despite losing 2.7 points to 57.4. Mobile’s business community remains strongly optimistic with an area
ABCI of 54.3, despite a 4.8 point decline. Huntsville’s
74.4 business confidence lost 2.4 points to 55.1, still strong as
political and budget uncertainties at the national level are
of less concern than in the past. A slight decline in Birmingham-Hoover’s ABCI puts the area’s sentiment below
70 40 ABCI by Metro Area Q3 2015
Capital Expenditures
62.8 No Change Birmingham-­‐Hoover Huntsville 7.0 Decrease 0 Mobile 10 20 30 Percent
54.8 Alabama 30.2 Increase Alabama Birmingham-­‐Hoover 40 50 60 Montgomery 53.1 55.1 54.3 57.4 The Center for Business and Economic Research would like to thank all Birmingham-Hoover metro area business executives who completed the third quarter 2015 ABCI survey during the first two weeks of June. We look forward to a continuing partnership with the
Birmingham Business Alliance and encourage you to return for the fourth quarter 2015 survey September 1-15. For more details on the
Alabama Business Confidence Index™, visit cber.cba.ua.edu/ABCI. Analysis provided by Gregg Bell, Ph.D., Research Associate.
Produced in partnership between
T H E C A P S T O N E O F H I G H E R E D U C AT I O N
C E NT E R FOR
B U S I NE SS AND
E CONOMI C
RE S E ARC H
2 | Center for Business and Economic Research, Culverhouse College of Commerce, The University of Alabama