ABCI
MONTGOMERY
ALABAMA BUSINESS CONFIDENCE INDEX
Volume 15, Second Quarter 2016
Montgomery Confidence Remains Highest
Among the Largest Metro Areas
Second Quarter 2016 Outlook
ABCI Montgomery rose 1.6 points to a very confident 57.3 on the
second quarter 2016 survey, but 2.8 points below the 60.1 index
registered a year ago. Sales, profits, hiring, and capital spending
are all expected to remain strong throughout the quarter.
Most Montgomery businesses in the survey are expecting
strong second quarter sales growth. After a 3.3 point gain, the
sales index remains very confident at 62.5. About 55 percent of
respondents forecast an increase in sales, while just 10 percent
anticipate a decline and another 35 percent foresee steady sales
in the coming quarter.
Profits should also post gains. A gain of 1.6 points puts the profits
index at a positive 56.9. While 35 percent expect to see only
stable profits, 45 percent anticipate increased profits and only 20
percent think profits will decline.
The Montgomery area is likely to continue to build on job gains
seen in recent months. The hiring index lost 0.3 points but
remains strong at 55.6. Almost 53 percent of panelists expect to
see job creation continue at last quarter’s pace, while 35 percent
are forecasting an increase in hiring and only 13 percent expect
slower job creation.
Capital spending growth will continue as the index gained 3.5
points to 58.1. About 40 percent of the panel expect no change
from current spending levels, while 48 percent anticipate
100 spending, and only 13 percent expect to cut back on
increased
this quarter‘s capital expenditures compared to last quarter.
Montgomery
Alabama
ABCI
57.3
55.1
National Economy
51.9
50.9
Alabama Economy
58.8
56.4
Industry Sales
62.5
59.8
Industry Profits
56.9
56.3
Industry Hiring
55.6
54.5
Capital Expenditures
58.1
53.0
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
Q2 2016 compared to Q1 2016
Montgomery area business executives continue to be
optimistic about prospects for the Alabama economy. A 4.1
point gain, keeps the state economy index at a quite confident
58.8.
Montgomery businesses remain somewhat confident about
the U.S. economy. The 51.9 reading is down 2.7 points as 45
percent of panelists forecast no change at the national level.
National Economic Outlook
90
80
70
Index
60
ABCITM Montgomery
58.8 59.0 58.7 59.4 60.1 57.4
32.5
Better
57.3
54.2 55.7
45.0
NoChange
0
40
10
20
30
40
50
60
Alabama Economic Outlook
30
20
Better
10
NoChange
0
Percent
22.5
Worse
50
Q2
Q3
2014
Q4
Q1
Q2
Q3
2015
Q4
Q1
Q2
2016
42.5
52.5
Percent
5.0
Worse
0
10
20
30
40
50
60
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ALABAMA BUSINESS CONFIDENCE INDEX Montgomery Metro Area
Montgomery Metro Area:
ABCI Montgomery in Context
Industry Performance Expectations
Business confidence in the Montgomery metro rose to 57.3
on the second quarter 2016 survey. This recovery marks
Montgomery’s 13th consecutive quarter of positive confidence.
The area ABCI outpaced the statewide index by 2.2 points.
With this, the Montgomery area ABCI has now been higher
than the statewide ABCI for 13 straight quarters.
Q2 2016 compared to Q1 2016
Sales
60
55.0
Increase
55
35.0
NoChange
Percent
10.0
Decrease
0
10
20
30
40
50
50
60
45
40
Profits
Alabama
35
45.0
Increase
30
35.0
NoChange
0
10
25
2007
Percent
20.0
Decrease
20
30
40
50
52.5
Percent
12.5
Decrease
0
10
20
30
40
50
2009
2010
2011
2012
2013
2014
2015
2016
Business sentiment in Alabama’s four largest metro areas is
positive. ABCI Montgomery again came in on top, after gaining
1.6 points to 57.3 on strong sales prospects. Mobile’s business
community also remains optimistic about sales with an area ABCI
of 55.2, despite a 2.1 point decline. The largest gain of any metro
area, 3.8 points in Birmingham-Hoover’s ABCI puts the area’s
sentiment at 54.3. Huntsville’s business confidence gained 2.2
points to 55.2.
35.0
NoChange
2008
60
Hiring
Increase
Montgomery
60
ABCI by Metro Area Q2 2016
Capital Expenditures
47.5
Increase
12.5
Decrease
0
10
Percent
20
30
55.1
AllMetros
55.1
Birmingham-Hoover
40.0
NoChange
Alabama
40
50
60
54.3
Huntsville
55.2
Mobile
55.2
Montgomery
57.3
The Center for Business and Economic Research would like to thank all Montgomery metro area business executives who completed the second quarter
2016 ABCI survey during the first two weeks of March. We look forward to a continuing partnership with the Montgomery Area Chamber of Commerce
and encourage you to return for the third quarter 2016 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., Socioeconomic Analyst.
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