Mobile Confidence Moderates, Hiring Outlook Improves After a strong uptick last quarter, ABCI Mobile slipped 2.8 points on the third quarter survey to come in at a state‐average 55.5. The most significant change is a 3.4 point Improvement in the hiring index. The largest declines are in area outlooks for the national economy and for capital expenditures. Panelists remain solidly optimistic about the Alabama economy and industry sales. Business sales should continue to pick up in the third quarter. The area sales index reading is a robust 61.0 and over 88 percent of executives forecast sales at or above their second quarter level. Profit growth is not likely to be as strong this quarter; the index is down 3.6 points to 54.4. While 41.2 percent forecast higher profits, 29.4 percent see a decrease. Job growth is expected to pick up in the third quarter. The hiring index rose 3.4 points to 55.2. Almost 59 percent of Mobile panelists forecast hiring at the same pace as last quarter and 32.3 percent anticipate increased hiring. Growth in the area’s capital spending could be weaker this quarter as the index dropped 4.2 points to 52.9. Still, about 56 percent of firms expect to maintain current expenditure levels and a net 8.9 percent forecast an increase. Mobile area businesses in construction and manufacturing have the strongest third quarter outlooks with ABCI readings above 63. Firms in financial activities registered a 59.2, with all industry indicators positive. Survey participants in other services also expect to add to employment. Panelists in healthcare continue to have a mostly negative outlook. ABCITM Mobile 100
Third Quarter 2014 Outlook Mobile Alabama ABCI 55.5 55.5 National Economy 49.3 51.4 Alabama Economy 60.3 59.4 Industry Sales 61.0 59.7 Industry Profits 54.4 54.9 Industry Hiring 55.2 54.9 Capital Expenditures 52.9 52.6 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. Mobile Metro Area: Business Environment Expectations Q3 2014 compared to Q2 2014 Mobile sentiment about the business environment dropped on the third quarter outlook. The national economy index fell 6.9 points to 49.3. Most executives expect U.S. growth to be about the same as in the second quarter, but 20.6 percent forecast slower growth. Although down 3.1 points to 60.3, the Alabama economy index remains robust; 85.3 percent of panelists see the state doing as well or better than last quarter. National Economic Outlook 90
26.5
Better
80
Index
60
50
52.9
Remain the Same
70
51.4
48.9 51.0 48.7
59.0 58.0
56.2 58.3 55.5
20.6
Worse
0
40
10
20
30
40
50
60
Alabama Economic Outlook 30
52.9
Better
20
32.4
Remain the Same
10
14.7
Worse
0
Q3
Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014
Q3
0
10
20
30
Percent 40
50
60
Mobile Metro Area: ABCI Mobile in Context Industry Performance Expectations Mobile area business confidence slipped to a state‐average 55.5 on the third quarter 2014 survey. That follows seven consecutive quarters where Mobile sentiment was above the Alabama reading. Metro area executives have been feeling generally positive since last spring’s Airbus announcement. Q3 2014 compared to Q2 2014 65
Sales 60
47.1
Increase
55
41.2
No Change
11.8
Decrease
0
10
50
20
30
40
50
60
45
40
Profits Alabama
35
41.2
Increase
No Change
29.4
Decrease
29.4
0
10
20
30
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
2007 2008 2009 2010 2011 2012 2013 2014 30
40
50
60
60
Hiring Plans 32.3
Increase
58.8
No Change
8.8
Decrease
0
10
20
30
40
50
Capital Expenditures 10
56.9
53.4
Mobile
17.6
0
55.5
Huntsville
55.9
Decrease
ABCI by Metro Area Q3 2014 Birmingham‐Hoover
No Change
20
30
Percent 40
50
60
For the third quarter of 2014, businesses statewide and in the four largest metro areas continue to feel optimistic about the economic environment and their industry prospects. The area ABCI is highest in the Montgomery and Birmingham‐Hoover metros, where confidence was about the same as last quarter. ABCI Mobile matched the statewide average of 55.5, although expectations moderated from their second quarter level. Huntsville executives are more optimistic on every indicator this quarter and show the largest improvement in the ABCI. Alabama
26.5
Increase
Mobile
55.5
Montgomery
59.0
50
52
54
56
58
60
The Center for Business and Economic Research would like to thank all Mobile metro area business executives who completed the third quarter 2014 ABCI survey during the first two weeks of June. We look forward to a continuing partnership with the Mobile Area Chamber of Commerce and encourage you to return for the fourth quarter 2014 survey September 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