TM
BIRMINGHAM-HOOVER
Alabama Business Confidence Index | Center for Business and Economic Research | The University of Alabama
Area Business Confidence Down, but
Mostly Strong
Birmingham-Hoover business executives are less optimistic about
their prospects as every component of the index declined in the
second quarter of 2015. The area ABCI fell 4.3 points to 53.8,
down 3.2 points from a year ago. Nevertheless, Alabama’s largest metro area has remained in positive territory since Q4 2012.
The sales index lost 2.6 points to a still optimistic 58.5. More
than 75 percent of panelists expect sales to remain constant or
increase compared to last quarter, while 24.0 percent forecast
a decrease. Profits at area firms should continue to improve,
despite a 5.6 point decline to 54.5. About 72 percent anticipate
the same or higher profits, although 28 percent feel profits will be
lower than last quarter.
Job creation should modestly improve in the second quarter,
despite a 5.2 point decline to 51.5. A still strong 80 percent of Birmingham-Hoover executives plan to hire at least at the same pace
as last quarter, while only 20 percent forecast a decrease in hiring.
A 3.7 point loss puts the capital investment index at 53.5. Eighty
percent of panelists expect spending to be at the same or higher
levels as last quarter with 20 percent anticipating a decrease in
expenditures.
Area businesses in retail trade and transportation, information,
and utilities are the most positive, both near 60 or above. All other
services firms also expect a solid quarter, but professional, scientific, and technical services are the area’s least optimistic industry
with a less than confident reading of 45.8.
ABCITM Birmingham-Hoover
100
Second Quarter 2015 Outlook
BirminghamHoover
Alabama
53.8
57.6
ABCI
National Economy
50.0
56.5
Alabama Economy
54.5
58.4
Industry Sales
58.5
61.5
Industry Profits
54.5
56.8
Industry Hiring
51.5
57.1
Capital Expenditures
53.5
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.
Birmingham-Hoover Metro Area:
Business Enviroment Expectations
Q2 2015 compared to Q1 2015
Executives in the Birmingham-Hoover metro area are less
optimistic about the business environment this quarter. Expectations for the U.S. economy fell 6.2 points to a neutral 50.0,
while the Alabama economy index declined 2.7 points to 54.5.
Seventy-two percent of panelists expect the same or stronger growth in the national economy and 80 percent forecast
a steady or better performance at the state level compared to
last quarter.
National Economic Outlook
90
Index
70
60
30.0
Better
80
42.0
Same
52.7 54.4 53.3 53.2
57.0 56.9
53.9
58.1
53.8
28.0
Worse
50
0
40
10
20
30
40
50
60
50
60
Alabama Economic Outlook
30
20
38.0
Better
10
42.0
Same
0
Q2
Q3
2013
Q4
Q1
Q2
Q3
2014
Q4
Q1 Q2
2015
20.0
Worse
0
10
20
30
Percent
40
ALABAMA BUSINESS CONFIDENCE INDEX
Birmingham-Hoover Metro Area
Birmingham-Hoover Metro Area:
ABCI Birmingham-Hoover in Context
Industry Performance Expectations
Birmingham-Hoover business confidence fell 4.3 points to 53.8
on the second quarter 2015 survey, erasing last quarter’s record
gains. Nevertheless, area executives have now felt optimistic,
with an ABCI above 50, for 10 consecutive quarters.
Q2 2015 compared to Q1 2015
Sales
60
52.0
Increase
No Change
24.0
Decrease
24.0
55
50
45
0
10
20
30
40
50
60
40
Profits
35
42.0
Increase
25
Q1
2007
28.0
Decrease
0
10
20
30
40
50
60
Hiring Plans
24.0
Increase
56.0
No Change
20.0
Decrease
0
10
20
Birmingham-Hoover
30
30.0
No Change
Alabama
30
40
50
Q1
2010
Q1
2011
Q1
2012
Alabama
53.8
Huntsville
20.0
57.5
Mobile
20
Q1
2015
57.6
Birmingham-Hoover
48.0
10
Q1
2014
ABCI by Metro Area Q2 2015
No Change
0
Q1
2013
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.
32.0
Decrease
Q1
2009
60
Capital Expenditures
Increase
Q1
2008
30
40
50
60
59.1
Montgomery
60.1
Percent
50
52
54
56
58
60
62
The Center for Business and Economic Research would like to thank all Birmingham-Hoover 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 Birmingham Business
Alliance 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