TM
BIRMINGHAM - HOOVER
Alabama Business Confidence Index | Center for Business and Economic Research | The University of Alabama
First Quarter 2015 Outlook
Area Business Confidence Looks
Strong at Start of 2015
Most Birmingham-Hoover business executives are feeling
optimistic about their prospects in the first quarter of 2015.
The area ABCI rose 4.2 points to 58.1, 4.8 points higher than
a year ago and the most positive reading since early 2006.
Every component of the index improved this quarter.
The sales index climbed 3.9 points to an optimistic 61.1.
Almost 60 percent of panelists expect sales to increase
compared to the fourth quarter, while 21.2 percent forecast
a decrease. Profits at area firms should generally be stable
or improving, with the index up 4.6 points to 60.1. About
52 percent anticipate higher earnings and 30.8 percent feel
profits will be about the same as last quarter.
Job creation should pick up in the first quarter; the
index rose 5.4 points to 56.7. While 51.9 percent of Birmingham-Hoover executives plan to hire at the same pace
as last quarter, 34.6 percent forecast an increase in hiring.
A 4.7 point gain puts the capital investment index at 57.2—
almost 52 percent of panelists expect spending to be about
the same as last quarter and a net 25.0 percent anticipate
an increase.
Area wholesale trade and professional services businesses are the most positive, with every indicator at 60 or
above. Construction and transportation, information, and
utilities firms also expect a solid quarter. While optimistic
overall, manufacturers and other services concerns expect
to cut back on hiring this quarter. Confidence rallied in the
financial services sector, increasing 7.0 points to 54.2.
ABCITM Birmingham-Hoover
90
58.157.4
National Economy
56.2
56.4
Alabama Economy
57.2
57.4
Industry Sales
61.1
60.6
Industry Profits
60.1
57.8
Industry Hiring
56.7
56.3
Capital Expenditures
57.2
55.9
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
Q1 2015 compared to Q4 2014
Executives in the Birmingham-Hoover metro area are
more optimistic about the business environment this
quarter. Expectations for the U.S. economy climbed 4.1
points to 56.2, while the Alabama economy index rose
2.5 points to 57.2.
Over 44 percent of panelists expect stronger growth
in the state’s economy and 42.3 percent forecast a better performance at the national level compared to last
quarter.
54.4 53.3 53.2
50.7 52.7
57.0 56.9
53.9
58.1
36.5
21.2
Worse
0
10
20
30
40
50
Alabama Economic Outlook
40
30
Better
20
Remain the Same
10
0
42.3
Remain the Same
70
Index
ABCI
Better
80
50
Birmingham-
Hoover Alabama
National Economic Outlook
100
60
44.2
38.5
17.3
Worse
Q1
Q2
Q3
2013
Q4
Q1
Q2
Q3
2014
Q4
Q1
2015
0
10
20
30
Percent
40
50
ALABAMA BUSINESS CONFIDENCE INDEX
Birmingham-Hoover Metro Area
ABCI Birmingham-Hoover in Context
Birmingham-Hoover Metro Area:
Birmingham-Hoover business confidence climbed 4.2
points to 58.1 on the first quarter 2015 survey. That’s the
highest ABCI reading since the first half of 2006. Area
executives have now felt optimistic, with an ABCI above 50,
for nine consecutive quarters.
Industry Performance Expectations
Q1 2015 compared to Q4 2014
Sales
60
59.6
Increase
55
19.2
No Change
50
21.2
Decrease
0
10
20
30
40
50
45
60
40
35
Profits
51.9
Increase
25
17.3
Decrease
0
10
20
30
40
50
60
Hiring Plans
34.6
Increase
51.9
No Change
13.5
Decrease
0
10
20
30
40
50
60
Q1
2007
Q1
2011
Q1
2012
Q1
2014
Q1
2015
57.4
58.1
54.9
Huntsville
58.2
Mobile
20
Q1
2013
Business sentiment in Alabama’s four largest metro areas is
solidly positive at the start of 2015. All component indexes
in each area are above 50, indicating broad improvement.
ABCI Montgomery came in on top, edging up 0.7 points
to 59.4. Mobile’s business community remains strongly
optimistic with an area ABCI of 58.2, despite a modest 0.5
point decline. A 4.2 point jump in Birmingham-Hoover’s
ABCI puts the area’s sentiment almost even with Mobile’s at
58.1. Huntsville’s business confidence rebounded 5.2 points
to 54.9, as political and budget uncertainties at the national
level abated.
11.5
10
Q1
2010
Birmingham-Hoover
51.9
No Change
0
Q1
2009
Alabama
36.5
Decrease
Q1
2008
ABCI by Metro Area Q1 2015
Capital Expenditures
Increase
Birmingham-Hoover
30
30.8
No Change
Alabama
30
40
50
60
59.4
Montgomery
Percent
52.0
54.0
56.0
58.0
60.0
The Center for Business and Economic Research would like to thank all Birmingham-Hoover metro area business executives who completed the first quarter 2015 ABCI survey during the first two weeks of December. We look forward to a continuing partnership with
the Birmingham Business Alliance and encourage you to return for the second quarter 2015 survey March 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 between
C E NT E R FOR
B U S I NE SS AND
E CONOMI C
RE S E ARC H