Business Optimism Continues Strong in Mobile Mobile reported the highest metro area business confidence for the third consecutive quarter. ABCI Mobile came in at 56.2, with panelists expecting strong improvement in industry sales and profits during the first quarter of 2014 plus a moderate pick up in hiring and capital investment. Still the area ABCI was down 1.8 points from the fourth quarter, with the U.S. outlook almost five points lower. The sales index registered a strong 61.1; 52.8 percent of Mobile area panelists expect sales in their industry to increase in the first quarter, while just 11.1 percent forecast a decrease. Profits should also improve overall—the index is at 59.0 with 44.4 percent of firms anticipating an increase in profits versus 8.3 percent projecting a decline. Mobile’s employment picture should continue to improve heading into 2014. Although down slightly, a hiring index of 54.2 indicates moderate job growth. Almost 56 percent of area firms plan to hire at the same pace as last quarter, and a positive net 16.7 percent see hiring picking up this quarter. Capital spending could increase modestly; close to 70 percent of businesses plan to invest at the same level as in the fourth quarter and 25 percent expect to boost spending. Manufacturing and financial activities concerns are the most upbeat overall this quarter and are the most likely to create jobs. Hiring could also pick up in professional services and in transportation, information, and utilities. Healthcare is the only industry with a negative outlook—sales could increase, but all other indicators are below 50. ABCITM Mobile 100
First Quarter 2014 Outlook Mobile Alabama ABCI 56.2
51.2
National Economy 48.6
47.8
Alabama Economy 61.1
53.8
Industry Sales 61.1
54.1
Industry Profits 59.0
52.3
Industry Hiring 54.2
49.6
Capital Expenditures 53.5
49.9
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 Q1 2014 compared to Q4 2013 Mobile businesses remain quite optimistic about the performance of the Alabama economy. The component index for first quarter 2014 is at 61.1 and almost 92 percent of area panelists see the state’s economic growth as steady or improving. But they turned slightly pessimistic about prospects for the U.S. economy, with an index of 48.6 and just 25 percent forecasting stronger growth this quarter. National Economic Outlook 90
55.5
60
Index
41.7
Remain the Same
70
50
25.0
Better
80
49.3
51.0 48.7
48.9
51.4
59.0 58.0
56.2
40
33.3
Worse
0
10
20
30
40
50
Alabama Economic Outlook 30
44.4
Better
20
47.2
Remain the Same
10
8.3
Worse
0
Q1
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2012 2013 2014
0
10
20
30
Percent 40
50
Mobile Metro Area: ABCI Mobile in Context Industry Performance Expectations Despite slipping 1.8 points to 56.2 on the first quarter 2014 survey, ABCI Mobile came in 5.0 points above the Alabama ABCI. Mobile area business sentiment has now been higher than the statewide level for six consecutive quarters. Confidence jumped in the third quarter of 2013 as Airbus construction got underway and has remained relatively high. Q4 2013 compared to Q3 2013 Sales 65
52.8
Increase
60
36.1
No Change
55
11.1
Decrease
50
0
10
20
30
40
50
60
70
Profits 45
40
Alabama
44.4
Increase
35
47.2
No Change
30
8.3
Decrease
0
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
2007 2008 2009 2010 2011 2012 2013 2014 10
20
30
40
50
60
70
Hiring Plans 30.6
Increase
55.6
No Change
13.9
Decrease
0
Mobile
10
20
30
40
50
60
70
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 still be dampened by the U.S. economy. However, sales and profits should generally improve in the first quarter. While the Huntsville outlook remains negative, business sentiment elsewhere in the state is positive. Mobile’s business confidence leads the state’s large metros again this quarter. ABCI by Metro Area Q1 2014 Capital Expenditures Alabama
25.0
Increase
Decrease
10
20
30
40
50
60
53.2
Huntsville
5.6
0
51.2
Birmingham‐Hoover
69.4
No Change
70
44.9
Mobile
56.2
Montgomery
55.4
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 first quarter 2014 ABCI survey during the first two weeks of December. We look forward to a continuing partnership with the Mobile 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