Upbeat Outlook of Mobile Business Executives Continues Mobile business confidence climbed 2.1 points to 58.3 for the second quarter of 2014, coming in just below the Montgomery metro’s 58.8. Amidst ongoing developments in sectors including aerospace and maritime industries, area panelists anticipate generally strong growth in sales, with moderate improvement in profits and capital investment and a modest increase in hiring this quarter. ABCI survey panelists in Mobile see sales picking up solidly compared to first quarter 2014 levels. The sales index rose to 63.4 and almost 68 percent forecast higher sales this quarter. Industry profits are expected to show moderate gains—the profits index registered 58.0 with 57.1 percent anticipating an increase in profits. Job growth is expected to continue in the second quarter, but at a more modest pace. Hiring plans are unchanged from last quarter at about 43 percent of Mobile area firms surveyed, while a positive net 14.3 percent foresee increased hiring. The outlook for capital expenditures has improved; the index rose 3.6 points to 57.1. Almost 54 percent of firms plan to continue spending at first quarter levels and 35.7 percent expect to increase investment. Mobile area businesses in construction, financial activities, and other services are the most optimistic overall this quarter and the most likely to create jobs. Manufacturers and firms in transportation, information, and utilities are also upbeat, although hiring could be flat. Panelists in healthcare and professional services have a mostly negative outlook. ABCITM Mobile 100
Second Quarter 2014 Outlook Mobile Alabama ABCI 58.3 55.6 National Economy 56.2 52.5 Alabama Economy 63.4 58.4 Industry Sales 63.4 61.6 Industry Profits 58.0 56.5 Industry Hiring 51.8 51.1 Capital Expenditures 57.1 53.7 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 Q2 2014 compared to Q1 2014 Mobile businesses are very positive about prospects for the Alabama economy in the second quarter of 2014. The state index is up 2.3 points to 63.4, with over 64 percent of exec‐
utives forecasting a better performance than last quarter. Sentiment about the U.S. outlook climbed back into positive territory at 56.2. Half of panelists expect stronger economic growth at the national level this quarter. National Economic Outlook 90
70
Index
60
50
50.0
Better
80
55.5
48.9 51.0 48.7
51.4
59.0 58.0
56.2 58.3
40
Remain the Same
25.0
Worse
25.0
0
10
20
30
40
50
60
70
Alabama Economic Outlook 30
64.3
Better
20
25.0
Remain the Same
10
10.7
Worse
0
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014
0
10
20
30
40
Percent 50
60
70
Mobile Metro Area: ABCI Mobile in Context Industry Performance Expectations Mobile area business confidence turned up to 58.3 on the second quarter 2014 survey, making three of the last four quarters that the index has registered 58 or above. ABCI Mobile has been higher than the statewide ABCI since fourth quarter 2012, bolstered over the last year by Airbus and other industrial developments. Q2 2014 compared to Q1 2014 Sales 65
67.9
Increase
14.3
No Change
Mobile
60
55
17.9
Decrease
50
0
10
20
30
40
50
60
70
45
Profits Alabama
40
57.1
Increase
35
14.3
No Change
30
28.6
Decrease
0
10
20
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
2007 2008 2009 2010 2011 2012 2013 2014 30
40
50
60
70
Hiring Plans 35.7
Increase
42.9
No Change
21.4
Decrease
0
10
20
30
40
50
60
70
Businesses statewide and in the four largest metro areas are generally feeling optimistic about the economic environment and their industry prospects in the second quarter of 2014. Confidence registered above 50 in all areas for the first time since the second quarter of 2012. Passage of the Bipartisan Budget Act and implementation of the Affordable Care Act have helped remove some of the uncertainty that had been depressing sentiment, although Huntsville is still experiencing the effects of federal spending reductions. ABCI by Metro Area Q2 2014 Capital Expenditures 55.6
Alabama
35.7
Increase
0
10
20
30
40
50
50.7
Huntsville
10.7
Decrease
57.0
Birmingham‐Hoover
53.6
No Change
60
70
Mobile
58.3
Montgomery
58.8
Percent 0
10
20
30
40
50
60
The Center for Business and Economic Research would like to thank all Mobile metro area business executives who completed the second quarter 2014 ABCI survey during the first two weeks of March. We look forward to a continuing partnership with the Mobile Area Chamber of Commerce and encourage you to return for the third quarter 2014 survey June 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