TM
M O N T G O M E R Y
Alabama Business Confidence Index | Center for Business and Economic Research | The University of Alabama
Montgomery Confidence Remains on
Top among Metro Areas
ABCI Montgomery rose 0.7 points to 60.1 on the second
quarter 2015 survey, its highest reading since 2006 and 1.3 points
above the 58.8 registered a year ago. Sales, profits, hiring, and
capital spending are all forecasted to grow this quarter.
Most Montgomery businesses in the survey are expecting
strong second quarter sales growth. The sales index ticked up
0.6 points to 64.7; 89.7 percent of respondents forecast steady
or increased sales, while just 10.3 percent anticipate a decline.
Profits should also continue to post solid gains. The index is
steady at 60.3 with 87.2 percent of panelists expecting the same
or higher earnings growth and only 12.8 percent predicting profit
declines.
During second quarter 2015, the Montgomery area is likely
to build on the job gains seen in recent months. Despite slipping
0.7 points, the hiring index remains strong at 58.3; 92.3 percent of
panelists expect to see job creation pick up or remain the same,
while only 7.7 percent forecast a decrease in hiring.
Capital spending growth could pick up slightly as the index
rose 0.6 points to 55.1. A robust 89.8 percent expect increased
or steady investment, while just 10.2 percent of executives plan to
decrease capital spending.
Optimism is high among all Montgomery industries represented in the second quarter survey except retail trade, where panelists expect declining profits. Professional, scientific, and technical
services are the most optimistic at 70.8. Strongest job growth
could come from firms in manufacturing, financial activities, and
retail trade.
ABCITM Montgomery
Second Quarter 2015 Outlook
Montgomery
Alabama
60.1
57.6
ABCI
National Economy
61.5
56.5
Alabama Economy
60.9
58.4
Industry Sales
64.7
61.5
Industry Profits
60.3
56.8
Industry Hiring
58.3
57.1
Capital Expenditures
55.1
55.4
Index above 50 indicates positive outlook.
Index below 50 indicates negative outlook.
Black values indicate an increase from previous quarter.
Red
values indicate a decrease from previous quarter.
Blue
values indicate no change.
Montgomery Metro Area:
Business Enviroment Expectations
Q2 2015 compared to Q1 2015
Montgomery area business executives continue to be
the most optimistic about prospects for the Alabama economy. The state economy index remains steady at 60.9, slightly
more that Mobile’s outlook and well ahead of the other metro
area expectations for the state. Montgomery executives expect the U.S. economy to show solid expansion, with the index
increasing 3.8 points to 61.5.
National Economic Outlook
100
70
Index
41.0
Same
80
60
51.3
Better
90
56.6 54.3 55.4
53.3
58.8 59.0 58.7 59.4 60.1
7.7
Worse
0
50
10
20
30
40
50
60
50
60
Alabama Economic Outlook
40
30
Better
20
Same
46.2
48.7
10
Worse
0
Q2 Q3
2013
Q4
Q1
Q2 Q3
2014
Q4
Q1 Q2
2015
5.1
0
10
20
30
Percent
40
ALABAMA BUSINESS CONFIDENCE INDEX
Montgomery Metro Area
Montgomery Metro Area:
ABCI Montgomery in Context
Industry Performance Expectations
Business confidence in the Montgomery metro rose to 60.1
on the second quarter 2015 survey, its highest level since mid2006. The area ABCI has been close to 59 over the last fourth
quarters. However, the statewide ABCI rose by only 0.2 points
this quarter so that ABCI Montgomery is now 2.5 points higher.
Q2 2015 compared to Q1 2015
Sales
61.5
Increase
28.2
No Change
60
10.3
Decrease
0
65
55
10
20
30
40
50
60
Profits
50
45
40
48.7
Increase
38.5
No Change
12.8
Decrease
0
10
20
30
40
50
60
41.0
Increase
51.3
No Change
7.7
0
10
Alabama
30
Montgomery
25
Hiring Plans
Decrease
35
20
30
40
50
60
Capital Expenditures
30.8
Increase
Q1
2007
Q1
2010
Alabama
20
30
Q1
2012
Q1
2013
Q1
2014
Q1
2015
57.6
Birmingham-Hoover
10.2
10
Q1
2011
Business sentiment in Alabama’s four largest metros is solidly positive going into the second quarter of 2015. All component indexes
in each area are 50 or above, indicating broad improvement. ABCI
Montgomery came in on top, edging up 0.7 points to 60.1. Mobile’s business community remains strongly optimistic with an area
ABCI of 59.1, a 0.9 point improvement. A 4.3 point fall in Birmingham-Hoover’s ABCI put the area’s sentiment at 53.8, the lowest of
the large metros. Huntsville’s business confidence rebounded 2.6
points to 57.5, as political and budget uncertainties at the national
level remain of less concern than in past quarters.
59.0
0
Q1
2009
ABCI by Metro Area Q2 2015
No Change
Decrease
Q1
2008
40
50
53.8
Huntsville
60
57.5
Mobile
59.1
Percent
Montgomery
60.1
50
52
54
56
58
60
62
The Center for Business and Economic Research would like to thank all Montgomery metro area business executives who completed the second quarter
2015 ABCI survey during the first two weeks of March. We look forward to a continuing partnership with the Montgomery Area Chamber of Commerce
and encourage you to return for the third quarter 2015 survey June 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
C E NT E R FOR
B U S I NE SS AND
E CONOMI C
RE S E ARC H