ABCI – Center for Business And Economic Research

Mildly Confident Expansionary Forecast for Q2 2024

April 16th, 2024

Reports for the Q2 2024 Alabama Business Confidence Index Now Available

The Alabama Business Confidence Index (ABCI) grew by 4.8 points to reach a mildly confident expansionary index of 54.1 in the Q2 2024 survey. All six component indexes saw increases from their Q1 2024 levels, though the magnitude varied from fairly low increase (2.2 points) to a large leap (9.6 points). Business leaders are forecasting second quarter growth with mild to strong confidence for all of the industry component indexes and the Alabama economy. The only negative index for the quarter is the US outlook, which has been contractionary since Q1 2022.

View the ABCI homepage for more details on the specific components of the statewide ABCI forecast which are also broken down by industry and firm size; or view individual metro reports for Birmingham-Hoover, Huntsville, Mobile, Montgomery, and Huntsville. Historical reports are available for download from the ABCI archive.

State Business Leaders Still Wary of U.S. Economy

October 18th, 2023

TUSCALOOSA, Ala. – State business leaders continue to be concerned about the national economy, dampening their financial outlook, according to the latest quarterly survey by The University of Alabama.

The UA Center for Business and Economic Research’s latest Alabama Business Confidence Index, taken in early September, decreased slightly, indicating expectations for a mild drop-off from last quarter’s economic performance.

The drop in confidence comes after the last survey found signs state business were reversing their negative outlook.

“The outlook for the U.S. economy remained strongly contractionary,” said Susannah Robichaux, socioeconomic analyst for CBER. “This index has been negative for the past eight quarters and the lowest component index for the past nine quarters, indicating sustained expectations for worse national economic conditions.”

The ABCI for the fourth quarter of 2023 is 48.2, which is slightly below the third quarter’s neutral index but still a better outlook than the post-pandemic low of 45.7 in the first quarter of this year. An index over 50 indicates an expansionary forecast compared to the previous quarter, and the closer the number is to 100, the more confident the forecast.

ABCI is gathered from a broad group of business executives across the state with six key indicators and a composite index. The statewide and national forecasts, along with industry-specific components like sales, profits, hiring and capital expenditures comprise the six indexes that combine to make the ABCI total.

Lingering concern over a possible economic recession could be why business leaders remain negative on the national economy. The rising interest rates by the Federal Reserve may finally start to slow the economy down now that business and personal savings built up during the pandemic are depleted, said Ahmad Ijaz, CBER executive director.

“Alabama’s economy is still doing relatively well, one reason businesses are more optimistic about the state’s economy than they are about the national economy,” he said.

CBER forecasts the state’s economy to grow 1.5% this year, about the same as in 2022 with both employment and state tax collections growing more slowly than last year.

This quarter, five of the nine industry groupings had an index above 50 showing a positive outlook for their own industry’s sales, profits, hiring and capital expenditures. The industry grouping with the highest and largest increase in confidence includes panelists in transportation, information and utilities.

Only three industries are forecasting a decrease in their sales compared to the previous quarter: wholesale trade, retail trade, and manufacturing.

Of the five metro areas in the state tracked in the survey, business leaders in Montgomery and Tuscaloosa have mildly positive outlooks for their local economies while the rest had negative outlooks.

The breakdown of all the industry forecasts by sector can be seen in the statewide ABCI report on CBER’s website.

The University of Alabama, part of The University of Alabama System, is the state’s flagship university. UA shapes a better world through its teaching, research and service. With a global reputation for excellence, UA provides an inclusive, forward-thinking environment and nearly 200 degree programs on a beautiful, student-centered campus. A leader in cutting-edge research, UA advances discovery, creative inquiry and knowledge through more than 30 research centers. As the state’s largest higher education institution, UA drives economic growth in Alabama and beyond.

Contact

Adam Jones, UA Strategic Communications, 205-348-4328, adam.jones@ua.edu

Source

Susannah Robichaux, socioeconomic analyst for CBER, scrobichaux@cba.ua.edu

Business Just Might be Getting Better, Executives Say

July 26th, 2023

By Business Alabama Staff

The state’s business leaders expect the economy to do no worse than it has been and maybe even improve, according to the quarterly Alabama Business Confidence Index.

The survey is conducted by the Center for Business and Economic Research at the University of Alabama.

“For the first time since the second quarter of 2022, five of the six component indexes that go into the overall ABCI reflect business leaders are neutral or mildly positive,” the University said in announcing the results. “These offer insight into the near-term state economy and forecasts for panelists’ own business and industry. The only negative index is the U.S. economic outlook, a sour national expectation they’ve reported consistently for nearly two years.”

Susannah Robichaux, socioeconomic analyst at CBER, said, “Over 50% of panelists are forecasting worse conditions in the national economy next quarter compared to the second quarter, and while we can’t say exactly why, ‘uncertainty’ is a useful umbrella to catch a lot of the concerns those business leaders could have.”

To gather the results, the CBER surveys executives around the state, asking about topics such as sales, profits, hiring and capital expenditures and analyzing results by region and by industry.

Those surveyed were most positive about the chance for increased sales this quarter and they expect to hire more workers, the CBER reported, with six of the nine industry groups showing a positive outlook. “Only two industries had a positive outlook in the first quarter of the year and four last quarter,” the UA statement said.

By region, Huntsville had the most positive expectations and Mobile the least.

“Earlier in the year, most businesses were anticipating a recession, but now there is a good chance the Federal Reserve might be able to pull a soft landing of slower growth without becoming a full-blown recession,” said Ahmad Ijaz, CBER executive director and director of economic forecasting. “With the rate of inflation slowing down, we may be towards the end of Fed rate hikes, which lowers the cost of doing business for most firms. That makes these firms a bit more optimistic about the economy going forward.”

Complete results are available here.

Q2 2023 Business Confidence Remains Negative

April 18th, 2023

Business leaders throughout Alabama still have an overall mildly negative forecast for Q2 2023, according to the latest Alabama Business Confidence Index (ABCI) survey. This is the fourth consecutive quarter that the index has been negative, though it is slightly less negative than last quarter’s ABCI. Business confidence has been declining since Q4 2021, but interestingly, the highest and lowest component indexes have been consistent these last seven quarters: hiring has been the highest index and is the only index to remain positive the entire time, and the US outlook has been the lowest index, consistently registering more than 10 points below the other indexes.

On the ABCI website, you can view the detailed ABCI metro reports for Birmingham-Hoover, Huntsville, Mobile, Montgomery, and Tuscaloosa; the full statewide report that includes an overview for Alabama and the ABCI broken down by industry and firm size; and access historical data. Read on for an overview.

CBER’s forecasters are anticipating very mild growth in 2023, with a 0.5-percent increase in Alabama GDP for 2023. Though positive, it is a slower rate of GDP growth than seen in 2021 (5.1 percent) and 2022 (1.6 percent). Alabama employment growth is expected to plateau in 2023, only growing by about 0.3 percent. Total tax receipts are forecast to grow by 5.3 percent in FY2023. While this is more growth than predicted for GDP and employment, it is still a notable decrease from last year’s 15.2-percent.

The forecasts from the metro areas ranged from moderately negative to mildly positive in the Q2 2023 survey. Business leaders in Huntsville had the highest ABCI at 52.0, making them the only metro with a positive outlook for the quarter. Mobile was not far behind, though, with a neutral ABCI of 49.6. Tuscaloosa had mild confidence in their negative forecast (45.7), which was tempered by mildly positive forecasts for industry sales and hiring. Montgomery and Birmingham–Hoover had the lowest ABCIs for the quarter at 43.8 and 43.0, respectively, with all of their component indexes registering at or below the neutral 50.

The industry index, which only includes panelists’ forecasts for their own industry sales, profits, hiring, and capital expenditures, ranged from mildly negative to moderately positive in the Q2 2023 survey. In Q2 2023, panelists in professional, scientific, and technical services and construction are continuing to forecast growth with mild confidence, but they are also joined by “All Other Services” and manufacturing, whose indexes grew significantly from Q1 2023 to reach moderately high levels of confidence in their positive outlook.

Though it remained negative, the index for retail trade had the highest increase from last quarter growing 9.4 points from its very negative Q1 2023 index to reach a moderately negative 43.8. Expectations for hiring in retail are positive, but business leaders in the industry are forecasting decreased capital spending with very strong confidence in Q2 2023. The outlook from business leaders in finance, insurance, and real estate was the lowest industry index for the quarter at a moderately negative 42.6. This was the only industry category to have negative forecasts for all of the component indexes.

Though the ABCIs by firm size all remained below 50, there were varied levels of confidence in the forecasts for the component indexes. Midsize firms, those with 20 to 99 employees, had the highest Q2 2023 ABCI which increased 6.8 points to reach an almost neutral 49.5 for the quarter. This comes after three quarters of the midsize ABCI being the lowest industry firm ABCI. Small firms, those with up to 19 employees, had a mildly negative ABCI of 48.8 for the quarter. Large firms had the lowest ABCI of the three groupings at a mildly negative 46.7, which is only 0.1 points above the Q1 2023 large firm ABCI, indicating a continuation of last quarter’s forecasts.

This makes 86 consecutive quarters that the Center for Business and Economic Research in UA’s Culverhouse College of Business has measured sentiment about the economy and industry prospects in the state. If you are a business leader in the state, be sure to do your part by registering to be an ABCI panelist and contributing to this unique forecasting tool in the Q3 2023 survey from June 1-17.

You can view past and current reports by clicking on the buttons above or following this link: https://cber.culverhouse.ua.edu/alabama-business-confidence-index/.

Negative Business Confidence in Q1 2023 ABCI

February 6th, 2023

Business confidence throughout the state remained mildly negative in the Q1 2023 Alabama Business Confidence Index (ABCI) survey. With over 60 percent of panelists forecasting worse conditions, the outlook for the US economy was the lowest for the quarter at 34.4. This quarter, the indexes for all of the industry categories fell: industry profits and capital expenditures are expected to decrease with mild confidence while sales are forecast to continue at the same rate as last quarter. Industry hiring was the only positive index for Q1 2023 with a mildly positive index of 53.6, with 34 percent of panelists anticipating an increase in their hiring compared to Q4 2022.

CBER’s forecasters expect very mild growth in 2023. The rebound of Alabama GDP is slowing, with only a 0.1-percent increase expected this year, and employment in the state is forecasted to remain somewhat stable and only decrease by 0.3 percent. Despite that, CBER anticipates significant growth in the Alabama tax receipts due to strong consumer spending.

The ABCIs for Alabama’s metro areas are all below 50 this quarter, but level of confidence in those forecasts varied. Huntsville had the highest ABCI at a mildly negative 47.9, followed closely by Mobile at 47.0. Both metros had moderately confident hiring indexes, which set them apart from the other metros. Tuscaloosa had an ABCI of 45.6, with neutral expectations for sales and hiring. Birmingham-Hoover and Montgomery had the lowest ABCIs of 43.5 and 42.9, respectively. The indexes in these metros were all mildly to strongly negative, with the exception of Montgomery’s mildly positive hiring forecast.

Panelists in professional, scientific, and technical services had the highest industry index at a moderately positive 55.9, with strongly confident expectations for increased sales and hiring compared to the previous quarter. Business leaders in construction are also forecasting increased hiring and sales, though with milder confidence, leading them to be the only other group to have a positive industry index at 52.5. Five of the nine industry groups still have positive expectations for hiring in Q1 2023, but most industries are forecasting decreased profits and capital spending compared to their Q4 2022 levels.

All three firm size groupings had negative ABCIs in the Q1 2023 survey. Midsize firms, those with 20 to 99 employees, had the lowest ABCI at a moderately negative 42.7, while the ABCIs for small firms, those with up to 19 employees, and large firms, those with 100 or more employees, were only mildly negative. This is the third consecutive quarter that the midsize firms have had a lower ABCI than their counterparts. Midsize firms had the lowest values for all of the component indexes in the Q1 2023 survey except hiring, where their moderately positive index of 55.1 was the most confident of all the groupings’ forecasts.

The ABCI is an initiative of the Center for Business and Economic Research located in the Culverhouse College of Business, The University of Alabama. This makes 85 consecutive quarters that the Center for Business and Economic Research in UA’s Culverhouse College of Business has measured sentiment about the economy and industry prospects in the state. Be sure to do your part by contributing to this unique forecasting tool in the Q2 2023 survey on March 1-17. You can view past and current reports by clicking on the buttons above or following this link: https://cber.culverhouse.ua.edu/alabama-business-confidence-index/.

State Business Leaders Still Sour on Economy – Q4 2022 ABCI Results

October 25th, 2022

TUSCALOOSA, Ala. – For the second consecutive quarter, state business leaders have a negative outlook on the economy, according to the latest quarterly survey by The University of Alabama.

The UA Center for Business and Economic Research’s latest Alabama Business Confidence Index, taken in early September, remains slightly negative following a similar outlook in the snapshot taken over the summer, the first negative outlook for the economy since early 2013.

“Panelists are still forecasting worse economic conditions in the U.S. with very strong confidence, in contrast with their more positive expectations for growth in industry hiring, sales, and capital expenditures,” said Susannah Robichaux, socioeconomic analyst for CBER.

The Alabama Business Confidence Index was 48.4, up slightly from last quarter, and marks the first time the index hasn’t dropped in a year. An index over 50 indicates a positive forecast compared to the previous quarter, and the closer the number is to 100, the more confident the forecast.

ABCI is gathered from a broad group of business executives across the state with six key indicators and a composite index. The statewide and national forecasts, along with industry-specific components like sales, profits, hiring and capital expenditures comprise the six indexes that combine to make the ABCI total.

Panelists continue to be more negative about the U.S. economy than the state’s economy, registering a 34.6 confidence index nationally and a moderately negative 46.3 index for Alabama. Still, those were greater than indices from last quarter.

Earlier this year, CBER economists had predicted Alabama’s economy would grow about 3% in 2022, but have since revised that outlook to 1.8% growth.

The report also breaks down responses from nine industry groups surveyed. The healthcare and social assistance industry, in stark contrast to the last two quarters, had a positive outlook, registering a 50.6 index. In the past two quarters, this industry had the most negative outlook out of all sectors.

“Panelists in the industry are optimistic that they will have increased hiring, sales, and profits, indicating expectations for a rebound from their two quarters of depressed forecasts,” Robichaux said.

Firms of all sizes had mildly negative outlooks for their companies.

“Panelists in large firms are forecasting growth in all of the industry components, while small firms had a negative profits index counteracting their optimism for sales, hiring and capital expenditures,” Robichaux said. “Mid-sized firms are still anticipating increased hiring in the fourth quarter of 2022, but the rest of their component indexes were negative.”

The breakdown of all the industry forecasts by sector can be seen in the statewide ABCI report on CBER’s website.

In addition to the statewide ABCI report, CBER also collects ABCI data to write individual reports for Alabama metro areas. These metro reports offer insight into the forecasts for each specific region. Interestingly, the business leaders in Tuscaloosa are feeling most confident of the three metro areas represented in the latest survey that included Huntsville and Birmingham.

Source: Susannah Robichaux, socioeconomic analyst for CBER, scrobichaux@cba.ua.edu

Press release written by Adam Jones, UA Strategic Communications.

State Business Leaders Uncertain on Short-Term U.S. Economy

April 12th, 2022

TUSCALOOSA, Ala. – Even with confidence in the state economy growing along with increasing industry profits and sales, state business leaders are decidedly negative in their outlook for the nation’s economy, according to the latest quarterly survey by The University of Alabama’s Center for Business and Economic Research.

The UA Center for Business and Economic Research’s latest Alabama Business Confidence Index, taken in early March, showed nearly 58% of business leaders forecast worse economic conditions for the United States in the second quarter of 2022.

“Inflation is a big part of the concerns for the U.S. economy,” said Susannah Robichaux, socioeconomic analyst for CBER. “Small and mid-sized firms had notably lower U.S. economic outlooks than large firms, which makes sense since these smaller businesses have tighter margins and would feel the impact of inflation sooner than their larger counterparts.”

The Alabama Business Confidence Index was 54.6, meaning state business leaders have mostly positive economic expectations for their businesses and the state economy in the upcoming quarter, however the latest survey continues the downward trend. An index over 50 indicates a positive forecast compared to the previous quarter, and the higher the number, the more confident the forecast.

The ABCI dropped 2.6 points from the last survey and is down from 67 in a survey taken in June 2021, just before a resurgence of the coronavirus through the Delta variant.

ABCI is gathered from a broad group of business executives across the state with six key indicators and a composite index. The statewide and national forecasts, along with industry-specific components like sales, profits, hiring and capital expenditures comprise the six indexes that combine to make the ABCI total.

While panelists have an overall positive outlook on the economy, nationally, business leaders aren’t as optimistic, reflected in an index of 38.5 for the national economy. In fact, state business leaders have not had a positive outlook for the U.S. economy since that survey snapshot before Delta.

“On one hand we have a relatively strong economy with very strong labor markets, both in terms of hiring and new job creation, labor force participation rate continues to tick upwards, corporate profits look great, and housing markets are doing well,” said Ahmad Ijaz, CEBR executive director. “But there are also signs pointing to the fact that the economy may be headed for a recession.”

Ijaz listed higher prices, falling exports, soaring inflation, rising interest rates, long-term interest rates currently lower than short-term rates, and the continued effects of Russia’s war in Ukraine.

Earlier this year, Ijaz and economists at CBER had predicted Alabama’s economy would grow about 3% in 2022, but have since revised that outlook to 2.7% growth.

Six of the nine industry groups surveyed remain positive in their outlook for the second quarter, with healthcare and social assistance businesses reporting the lowest negative outlook.

The breakdown of all the industry forecasts by sector can be seen in the statewide ABCI report on CBER’s website.

In addition to the statewide ABCI report, CBER also collects ABCI data to write individual reports for Alabama’s five major metro areas. These metro reports offer insight into the forecasts for each specific region.

Source: Susannah Robichaux, socioeconomic analyst for CBER, scrobichaux@cba.ua.edu

Press Release by Adam Jones, UA communications, 205-348-4328, adam.jones@ua.edu

Despite Lingering Pandemic, State Businesses Remain Optimistic

October 12th, 2021

TUSCALOOSA, Ala. – While not as confident in the economic outlook as they were earlier this year, state business leaders remain optimistic in growth through year’s end, according to the latest quarterly survey by The University of Alabama.

Confidence in economic growth among state business leaders has been steadily trending upward from the early days of the global pandemic, reaching a historically high confidence in the survey of local business leaders taken in June just before the contagious Delta variant of the coronavirus that causes COVID-19 spread in the region.

The UA Center for Business and Economic Research’s latest Alabama Business Confidence Index, taken in the first half of September, showed business leaders are moderately confident for improving economic conditions in Alabama, but are on the fence about the direction of the United States’ economy.

The latest ABCI was 58, down from 67 in this summer’s report. An index over 50 indicates a positive forecast compared to the previous quarter, and the higher the number, the more confident the forecast. The statewide and national forecasts, along with industry-specific components like sales, profits, hiring and capital expenditures comprise the six indexes that combine to make the ABCI total.

“That is a significant drop, but since it still remains positive, it’s not as significant as if it had crossed the 50 threshold to be a negative forecast,” said Susannah Robichaux, socioeconomic analyst for CBER. “Business leaders were feeling very optimistic last quarter about growth compared to second quarter 2021. Now, they are forecasting a continuation of that positive trajectory but are not feeling quite as confident about that expectation.”

However, business leaders were not as optimistic on the national economic outlook for the last quarter of 2021, compiling a 50.7 confidence index, down 14 points from the index reported this summer. Ahmad Ijaz, CBER executive director, said the expectation for the second half of this year is weaker economic growth than the boom of the first half of 2021, but the third quarter may end up weaker than predicted.

Still, economic growth should pick back up when some global supply issues caused by the pandemic are resolved next year, he said.

“Overall, the economy seems to be doing okay,” Ijaz said. “We are adding more jobs, albeit, at a slower pace, payroll income levels are going up, household wealth is growing, more people are working and entering the labor force, but there is just no way to match the kind of growth rates we saw in the second half of last year or earlier this year.”

Eight of the nine industry groups surveyed remain positive in their outlook for the fourth quarter, with only leaders in the state’s retail trade reporting a negative confidence index.

The industries do report strong expectations for increased hiring compared to the last quarter.

“The very confident hiring index means that we’ll likely see a continuation of businesses rebuilding their workforce and hiring at a high rate next quarter,” Robichaux said.

The breakdown of all the industry forecasts by sector can be seen in the statewide ABCI report on CBER’s website.

In addition to the statewide ABCI report, CBER also collects ABCI data to write individual reports for Alabama’s five major metro areas. These metro reports offer insight into the forecasts for each specific region.

https://news.ua.edu/2021/10/despite-lingering-pandemic-state-businesses-remain-optimistic/

Source:

Susannah Robichaux, socioeconomic analyst, UA’s Center for Business and Economic Research, 205-348-3781, scrobichaux@culverhouse.ua.edu

Contact:
Adam Jones, UA communications, 205-348-4328, adam.jones@ua.edu

The University of Alabama, part of The University of Alabama System, is the state’s flagship university. UA shapes a better world through its teaching, research and service. With a global reputation for excellence, UA provides an inclusive, forward-thinking environment and nearly 200 degree programs on a beautiful, student-centered campus. A leader in cutting-edge research, UA advances discovery, creative inquiry and knowledge through more than 30 research centers. As the state’s largest higher education institution, UA drives economic growth in Alabama and beyond.

Top Issue Facing Alabama: Education and Workforce Training

August 31st, 2021

Education and workforce training is the top issue facing Alabama’s economy, according to business leaders who participated in the 2020 Alabama Business Confidence Index (ABCI) Panelist Poll.

Rank of the top issues facing Alabama: education and workforce training is first, infrastucture is second, economic and business development is third, government is fourth, and job growth is fifth. Alabama business leaders have voted education and workforce training as the state’s primary issues for the last five years. In the 2020 survey, 74.5 percent of panelists reported concerns about the state of the education and workforce training system, and 18 percent of those panelists provided specific comments, which included concerns about the lack of funding for education, the shortage of qualified workers, and a desire for more short-term training opportunities for all fields. Panelists ranked economic and business development as a close second at 70.4 percent, and 20.0 percent shared worries about the uncertainty related to COVID-19 and the importance of diversifying the state economy.

List of the top issues facing Alabama Companies ranked from highest to lowest % votes: economy in general is first, workforce is second, government regulations and taxes is third, and company finances and development is fourth.

Panelists were also able to select the top issues facing their own companies. Though almost half of the business leaders were concerned about workforce issues, 63.9 percent selected the “economy in general” as their number one concern. Among those who selected the economy as one of their top concern, 14.5 percent shared more details about their selection, with many naming the uncertainty due to COVID-19 and 2020 election as their main concerns.

Each quarter, business leaders respond to the ABCI survey and receive reports that summarize the business sentiment for the state and its five largest metro areas. Business leaders use these quarterly reports as a general indicator of local and regional economic outlook (80.6 percent), as background information for their own forecasts (43.9 percent), and to compare their personal projections to their fellow peers in business (35.7 percent). In addition, 28.6 percent of business leaders who responded to the poll use ABCI reports for economic development, decision-making, or short-term planning, and 24.5 percent share the results from ABCI with others.

About the ABCI Panelist Poll
The Center for Business and Economic Research (CBER) in The University of Alabama’s Culverhouse College of Business conducts an annual survey of Alabama business leaders to determine the top issues facing the state and their respective companies. The ABCI panel is open to business executives across the state, and was conducted throughout November 2020.

Registration and current and historical results are available on the ABCI page of CBER’s website. Newsletters with results are provided for Alabama and for the Birmingham-Hoover, Huntsville, Mobile, Montgomery, and Tuscaloosa metro areas. Panelists can take the Q4 2021 survey from September 1-15, 2021. For questions, please contact socioeconomic analyst, Susannah Robichaux at scrobichaux@cba.ua.edu.

State’s Economic Recovery Booming Just Before COVID-19 Resurgence

August 10th, 2021

TUSCALOOSA, Ala. – Two snapshots of the state’s economy earlier this summer show recovery from the pandemic recession of 2020 exceeding expectations, with business leaders confident things were getting even better, according to research from The University of Alabama.

It’s unknown whether the rise of the Delta variant of the coronavirus that causes COVID-19 will dampen the economy, but, if it does, nothing short of another lockdown could stunt the recovery, said Ahmad Ijaz, executive director of the UA Center for Business and Economic Research.

“We will most likely see 5.0 to 5.5 percent growth for this year, and perhaps next year too, on the condition that we don’t shut down the economy again,” Ijaz said. “Another shut down will most likely have a much more devastating impact on the economy.”

CBER released its quarterly economic forecast, Alabama Business, today which showed the state’s economy grew 6.8% in the first quarter of 2021, which followed a strong half of 2020 after plummeting economic activity the first half of last year.

The forecasted 5.5% economic growth for 2021 will make up the 2.7% drop in economic activity in 2020.

The state’s economy has continued to beat growth forecasts as business sectors come back at different speeds because of supply constraints and loose monetary policy fueled business and consumer spending, Ijaz said.

“At the start of the year, everybody was predicting that the economy would get back to its normal course after a huge jump in growth in third and fourth quarters of 2020, but as the year went along the economic growth just kept on accelerating,” he said.

The state gained 13,200 jobs in June over the previous three months. From June 2020 to June 2021, the state gained 89,200 jobs with a seasonally adjusted unemployment rate this June of 3.3 percent, down from the 7.7 percent unemployment rate in June 2020, according to the study.

Also, CBER released its latest quarterly survey of local business leaders. Taken in the first half of June, it showed historical confidence about the direction of Alabama’s economy. The Alabama Business Confidence Index was 67, up nearly three points from the spring survey.

It’s the most confidence business leaders have had in forecasting economic growth since the third quarter of 2004, according to CBER data. Plus, this is the third consecutive quarter all the industry-level ABCIs have been positive, indicating sustained expectations for economic expansion across all industries in Alabama.

An index over 50 indicates a positive forecast compared to the previous quarter, and the higher the number, the more confident the forecast. The statewide and national forecasts, along with industry-specific components like sales, profits, hiring and capital expenditures comprise the six indexes that combine to make the ABCI total.

For those participating in the survey, more than three-fourths forecasted a better economic outlook for Alabama in the third quarter of the year, and 70 percent expected sales to increase compared to the second quarter of 2021.

“Alabama business leaders were feeling really good in June,” said Susannah Robichaux, socioeconomic analyst for CBER. “Many businesses throughout the state experienced some contraction and uncertainty due to COVID, and these latest ABCI results tell us that folks were really anticipating a recovery and feeling confident in their forecasts for growth. Now, some of that is up in the air due to the Delta variant making such a strong showing.”

The breakdown of all the industry forecasts by sector can be seen in the statewide ABCI report on CBER’s website.

In addition to the statewide ABCI report, CBER also collects ABCI data to write individual reports for Alabama’s five major metro areas. These metro reports offer insight into the forecasts for each specific region.

Original Source: https://news.ua.edu/2021/08/states-economic-recovery-booming-just-before-covid-19-resurgence/

The University of Alabama, part of The University of Alabama System, is the state’s flagship university. UA shapes a better world through its teaching, research and service. With a global reputation for excellence, UA provides an inclusive, forward-thinking environment and nearly 200 degree programs on a beautiful, student-centered campus. A leader in cutting-edge research, UA advances discovery, creative inquiry and knowledge through more than 30 research centers. As the state’s largest higher education institution, UA drives economic growth in Alabama and beyond.

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