Montgomery Business Confidence Improves First Quarter 2014 Outlook ABCI Montgomery ticked up 1.1 points to 55.4 on the first quarter 2014 survey. Area business executives are feeling optimistic about the business environment and expect improvement on all four industry indicators this quarter. That’s a much better outlook than the ABCI value of 44.3 heading into the first quarter a year ago. Montgomery was the only large metro area where confidence increased compared to its fourth quarter 2013 reading. Montgomery Alabama ABCI 55.4
51.2
National Economy 56.1
47.8
Alabama Economy 56.8
53.8
Industry Sales 56.1
54.1
Industry Profits 53.8
52.3
Industry Hiring 53.0
49.6
Capital Expenditures 56.8
49.9
Montgomery area businesses should continue to see moderate growth in sales during the first quarter, with the index at 56.1. Almost 52 percent of panelists forecast higher sales, while just 21.2 percent anticipate a decrease. Profit trends should generally be positive; the index is up 1.5 points to 53.8 and 75 percent of firms surveyed expect profits at or above fourth quarter 2013 levels. The hiring index rose 1.3 points to 53.0. Over 42 percent of firms plan to add jobs compared to 24.2 percent expecting to cut back, for a net positive of 18.2 percentage points. Capital investment should pick up in the Montgomery area; the index jumped 6.2 points to 56.8. Almost 46 percent of respondents plan to increase spending and 36.4 percent anticipate no change compared to last quarter. Montgomery area professional services firms remain the most optimistic with an ABCI of 63.3, although hiring is likely to be flat. Businesses in manufacturing and in finance, insurance, and real estate are positive across the board and expect to see at least moderate job growth this quarter. ABCITM Montgomery 100
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. Montgomery Metro Area: Business Environment Expectations Q1 2014 compared to Q4 2013 The U.S. and Alabama economies are both expected to perform moderately better in the first quarter; the national economy index registered 56.1 and the state index 56.8. Just 12.1 percent of panelists see a possible downside to the state’s economy. Montgomery is the only metro with a positive U.S. outlook this quarter. National Economic Outlook 90
Index
30.3
Remain the Same
70
60
48.5
Better
80
54.3
50
58.4
53.3
53.1 51.3
21.2
Worse
56.6 54.3 55.4
0
44.3
40
10
20
30
40
50 Alabama Economic Outlook 30
45.5
Better
20
42.4
Remain the Same
10
12.1
Worse
0
Q1
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2012 2013 2014
0
10
20
30
Percent 40
50
Montgomery Metro Area: ABCI Montgomery in Context Industry Performance Expectations Montgomery business confidence rose 1.1 points to 55.4 in the first quarter, counter to the modest 0.7 point drop in confidence seen statewide. The local ABCI is now 4.2 points above the Alabama reading, remaining above statewide confidence for a fourth consecutive quarter. Q1 2014 compared to Q4 2013 Sales 60
51.5
Increase
55
27.3
No Change
21.2
Decrease
0
10
50
20
30
40
50
60
Profits 45
40
35
Alabama
45.5
Increase
30
25
24.2
Decrease
0
10
20
30
40
50
60
Q1
Q1
Q1
Q1
Q1
2007 2008 2009 2010 2011
33.3
No Change
24.2
Decrease
0
10
20
30
40
50
60
Capital Expenditures 18.2
0
10
20
30
53.2
Huntsville
36.4
No Change
51.2
Birmingham‐Hoover
45.4
Decrease
ABCI by Metro Area Q1 2014 Alabama
Increase
40
Panelists completed the first quarter 2014 ABCI survey during the first two weeks of December, when a possible federal budget agreement showed promise, but was not certain. The general feeling was that business prospects would be dampened by the U.S. economy. Still, sales and profits should generally improve in the first quarter. While the Huntsville outlook remains negative, business sentiment elsewhere in the state is positive. 42.4
Increase
Q1
Q1
Q1
2012 2013 2014
Hiring Plans Montgomery
30.3
No Change
50
60
Percent 44.9
Mobile
56.2
Montgomery
55.4
0
10
20
30
40
50
60
The Center for Business and Economic Research would like to thank all Montgomery metro area business executives who completed the first quarter 2014 ABCI survey during the first two weeks of December. We look forward to a continuing partnership with the Montgomery Area Chamber of Commerce and encourage you to return for the second quarter 2014 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 with the