State Business Leaders Expecting Economic Growth

• April 9th, 2021

TUSCALOOSA, Ala. – In the latest quarterly survey by researchers at The University of Alabama, business leaders in the state are feeling more encouraged about the economy than they have since the global pandemic began.

The UA Center for Business and Economic Research’s most recent Alabama Business Confidence Index shows that local business leaders have strong expectations for economic growth in the second quarter of 2021. The statewide business confidence index was 64.3, up more than eight points from the survey of the first quarter of 2021.

It’s one of the highest indexes ever and the most confident business leaders have been in the economy since the second quarter of 2019. It continues a steady recovery of confidence since the early days of the pandemic in the second quarter of 2020, when the ABCI decreased to 50.5 and business leaders were uncertain of what the coming quarter would hold for the economy.

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.

“This outlook suggests that business leaders in Alabama are ‘shaking off the pandemic,’” said Susannah Robichaux, a socioeconomic analyst for the center. “When there is a higher ABCI, it signals that business leaders are feeling optimistic about the coming quarter, which is absolutely informing their own decisions about their businesses.”

Business leaders expect to see an increase in sales, profits, hiring and expenditures in the second quarter, according to the survey.

Firms of all sizes reported especially strong confidence in growth compared to last quarter, though small firms with fewer than 20 employees had the most confidence.

In a telling sign from the survey, business leaders feel strongly they will increase hiring in the second quarter compared to the first. Only 6.5% of respondents expected to decrease hiring, and the healthcare and social assistance industry is the only one of nine industry categories that expects to possibly decrease in hiring, hinting at expectations of a possible contraction after a year of industry expansion.

Overall, business leaders are more confident in the state economy than the national outlook, but confidence in both increased from the first quarter of 2021.

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.

Workforce Training Remains Top Issue in 2019

• March 3rd, 2020

Education and workforce training remains the top issue facing Alabama, according to the 2019 Alabama Business Confidence Index (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.

This is the third year that panelists have identified education and workforce as the top issue facing Alabama. In the 2019 survey, 84.7 percent of panelists reported concern about the state of the education and workforce training system, with specific concerns for the lack of funding for K-12 improvements; a desire for including a more career-focused curriculum in high school and junior colleges; and hopes for increased availability of workforce training programs. The goal of these improvements would be to create a more highly-trained workforce throughout the state to fill these higher-skilled positions.

The importance of this issue was echoed when panelists were asked about the top issue facing their individual companies. Having access to skilled or experienced workers allows businesses to thrive and grow, but many panelists are concerned about Alabama’s workforce. In the 2019 ABCI Panelist Poll, 72.2 percent of respondents reported difficulty in attracting and retaining qualified workers.

In addition to workforce concerns for the state, over half of the Alabama business leaders surveyed also included infrastructure, economic and business development, and dissatisfaction with government as the top issues facing Alabama in 2019. A significant portion of businesses were also concerned about job growth. When asked for the top issues facing their individual companies, panelists included government regulation and taxes, the economy in general, and company finances and development in the 2019 survey. The ranking of both lists of issues has remained consistent for the past two years.

Each quarter, business leaders respond to the ABCI survey and receive the reports that summarize the business sentiment for the state and its four largest metro areas. When asked how they use the results, over 80 percent of the 2019 panelists said they use it as a general indicator of local and regional economic outlook. About 47 percent use the ABCI reports to compare their personal projections to others’ viewpoints, and 40 percent use it as background information for their own forecasts. About 22 percent of business leaders who responded to the Panelist Poll use the ABCI reports for economic development, decision-making, or short-term planning, while that same percentage share the results with others.

The ABCI panel is open to business executives across the state. 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, and Montgomery metro areas. Panelists can take the Q2 2020 survey until March 15. For questions, please contact socioeconomic analyst, Susannah Robichaux at scrobichaux@cba.ua.edu.

Alabama Business Confidence Strengthens in 2020

• February 5th, 2020

Business leaders throughout Alabama continued to express strong confidence in economic growth in the first quarter of 2020, with a very positive outlook for increased industry sales and profits, and the general strengthening of Alabama’s economy. This is shown in the latest results for the Alabama Business Confidence Index (ABCI), a quarterly survey of statewide business sentiment conducted by the Center for Business and Economic Research in UA’s Culverhouse College of Business. Highlights of this quarter’s reports include an industry breakdown of results with retail trade leading in confidence; strong optimism from the Montgomery, Mobile, and Huntsville metro areas; and small businesses continuing to have the highest ABCI. To read more about the Q1 2020 results, visit the ABCI page, where you can find the most recent results as well as download historical reports and data.

What is the ABCI?

Each quarter, CBER reaches out to business leaders throughout Alabama with a simple survey about their expectations for the coming quarter. Four of the six questions gauge the panelists’ specific industry expectations, including their sales, profits, hiring, and capital expenditure, and the remaining two focus on the general economic conditions in Alabama and the US. Once CBER has analyzed the results, reports offering insight into statewide business confidence, as well as the state’s four largest metro areas (Birmingham-Hoover, Huntsville, Mobile, and Montgomery), are available on the ABCI page of CBER’s website. Alabama businesses, as well as local governments and chambers of commerce, use the ABCI to get a feel for the business community’s expectations or measure their own forecasts against.

How do I become an ABCI panelist?

Any person who leads a business in Alabama is welcome to become a panelist. You can register here, or from the ABCI homepage.

Alabama Businesses Regain Confidence Moving into Q4 2019

• November 5th, 2019

TUSCALOOSA, Ala. — Business leaders throughout Alabama are feeling confident moving into the fourth quarter of 2019, according to a recent report from The University of Alabama.

The Alabama Business Confidence Index, a quarterly survey of statewide business sentiment by the Center for Business and Economic Research in UA’s Culverhouse College of Commerce, showed a slight improvement in statewide business confidence, gaining 0.8 points to register at 59.3. All of the component indexes remained moderately to strongly positive, signaling Alabama business leaders’ continued expectations for economic growth in Q4 2019.

Each quarter, CBER reaches out to business leaders throughout Alabama with a simple survey about their expectations for the coming quarter. Four of the six questions gauge the panelists’ specific industry expectations, including their sales, profits, hiring, and capital expenditure, and the remaining two focus on the general economic conditions in Alabama and the US. Once CBER has analyzed the results, reports offering insight into statewide business confidence, as well as the four state’s four largest metro areas, are available on the CBER website. Alabama businesses, as well as local governments and chambers of commerce, use the ABCI to get a feel for the business community’s expectations or measure their own forecasts against.

Heading into the fourth quarter of 2019, business confidence has somewhat stabilized throughout the state’s four largest metropolitan statistical areas (MSAs) this quarter after more dramatic swings in the beginning of 2019. Like in Q3 2019, Montgomery is the only metro area that communicated negative business confidence with a mildly negative ABCI of 48.5. Meanwhile, Huntsville business leaders continue to lead in confidence with a very strong Q4 2019, while Mobile’s business community is also very confident moving into this quarter. Panelists in Birmingham-Hoover are more moderate in their expectations but are also feeling optimistic about growth compared to the previous quarter.

Looking at specific industries in Alabama, panelists in the “All Other Services” have the highest industry ABCI after increasing 1.7 points to reach 66.2 in the Q4 2019 survey. The “All Other Services” category includes management of companies and enterprises; education services; arts, entertainment, and recruitment; accommodation and food services; and other services that don’t fit into the survey’s other categories. Other industries were largely optimistic in their forecasts, with only wholesale trade forecasting a slight decrease in their industry categories this quarter.

For more details about the various industries’ responses, results broken down by firm size, and the specific levels of business confidence heading into the last quarter of 2019, you can view the ABCI reports here.

Business Executives Reported Education and Workforce Training Remains the Top Issue in Alabama

• July 24th, 2019

TUSCALOOSA, Ala. – Alabama business executives believe education and workforce training remains the top issue currently facing the state.

Business executives are surveyed annually by the Center for Business and Economic Research (CBER) in The University of Alabama’s Culverhouse College of Commerce on various topics related to issues facing the state and their respective companies.

Education and workforce training also ranked first in the 2016 survey. Infrastructure improvement ranked second in the 2017 survey, up from sharing the third and fourth place a year before, one of the most significant shifts in rankings from the previous year. Almost 80 business executives participated in the latest survey in November 2017. The survey has been conducted since 2013 and asks for opinions of the Alabama Business Confidence Index™ (ABCI) panelists.

In issues affecting companies directly, business executives expressed similar concerns and ranked workforce their top issue, up from the third place in the 2016 survey.

“Business leaders expressed concern in their comments over the lack of skilled and educated workers,” said Viktoria Riiman, socieoeconomic analyst at CBER.

Riiman noted that government regulations and taxes remained the second top issue impacting companies. The economy in general and company finances and development were the third and fourth-ranked issues.

While education and workforce training as well as infrastructure top the issues facing the state, economic and business development, dissatisfaction with government, and job growth rounded out the top five issues facing Alabama.

Each quarter, business executives across the state take the ABCI survey. Almost 77 percent of ABCI panelists use the confidence index as a general indicator of local or regional economic outlook. About 57 percent of business executives also compare personal projections to others’ viewpoints and 44 percent use the ABCI results as a background information for estimating future trends. Additionally, 35 percent of business executives share results with others and 18 percent use the ABCI results in short-term planning.

The ABCI panel is open to business executives across the state. Registration and current and historical results are available on the ABCI website. Newsletters with results are provided for Alabama and for the Birmingham-Hoover, Huntsville, Mobile, and Montgomery metro areas. Panelists can take the Q2 2018 survey until March 15.

CONTACT: Viktoria Riiman, Socioeconomic Analyst, 205-348-3757, vriiman@cba.ua.edu