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.

Dr. Sam Addy Presents to Alabama Economics Club

• February 5th, 2020

BIRMINGHAM, Ala. — Dr. Sam Addy, Associate Dean for Economic Development Outreach and Senior Research Economist at Center for Business and Economic Research (CBER), is known throughout Alabama and the US as a knowledgeable researcher and vivacious presenter. Dr. Addy is a highly sought after presenter as an expert on topics like the Alabama economy, economic policy, economic development, workforce development, and many more. On January 17, he lived up to his reputation, delivering an entertaining and informative presentation on the economic impact of the University of Alabama on the state to the Alabama Economics Club (AEC) in Birmingham.

In his presentation, Dr. Addy broke down the fundamentals of economic development and then emphasized the education’s role in that process. He went on to specifically address the University of Alabama’s economic impact on the Tuscaloosa Metro Area and the State of Alabama as a whole. For more details, you can view his presentation here or visit the UA Impact Report page on the CBER website.

Dr. Addy is no stranger to the AEC; he is a founding member and has been instrumental in the growth of the organization. The Alabama Economics Club is now the state’s premier professional association for business economists and those interested in economics. The club is the Alabama chapter of the National Association of Business Economics (NABE), an organization that has attracted the brightest minds and the most prominent figures in economics, business, and academia to its membership since its inception in 1959. The AEC hosts luncheons every other month featuring speakers who are experts in their fields, offering attendees the opportunity to learn something new and network with other Alabama professionals. Though the quality of the presentation is always high, there is a lot of variety in the speakers’ occupations, with professionals coming from the private industry, economic development, the Federal Reserve, and more. For more information on the club, visit their Facebook page.

As always, CBER’s staff may make presentations at conferences and meetings for an honorarium. To learn more about all the work CBER does, visit our What We Do page. To schedule an event, email uacber@cba.ua.edu or call (205) 348-6191.

Alabama Counts! 2020 Census Campaign Kicks Off

• February 4th, 2020

MONTGOMERY, Ala. — 2020 Census efforts are well underway in Alabama as the decennial census is right around the corner. Susannah Robichaux, a socioeconomic analyst for the Center for Business and Economic Research (CBER), traveled to Montgomery on January 22 to participate in the launch of the Alabama Counts! 2020 Census campaign. CBER is proud to be working with Governor Ivey, the Alabama Department of Economic and Community Affairs (ADECA), and the U.S. Census Bureau to support Alabama’s 2020 Census efforts. The speakers at the January 22 kick-off meeting covered some important topics.

Kenneth Boswell, director of ADECA and chairman of Alabama Counts, kicked off the event by acknowledging the incredible work that Alabama has already put forth. ADECA is funding $1 million worth of grants to support grassroots efforts that will boost decennial census participation with hard-to-reach communities, as well as travelling throughout the state to develop partnerships and help communities organize local census committees.

Governor Kay Ivey spoke to the need for an accurate and full count for the state, emphasizing the impact of the 2020 Census on Alabama’s presence in the House of Representatives and the allocation of federal funding for schools, healthcare, and job opportunities in our state. She finished her presentation with a call to action: “Let’s work together to make sure Alabama Counts!”

ADECA is working with Big Communications Inc. to get the word out about the 2020 Census in Alabama. Senior strategist, Ally Clokey, presented Big Communcations’s research and strategies at the meeting. The marketing firm has put together profiles for each county that include details to help each county connect with their specific population. In addition, Big Communications has also created a wealth of campaign resources for local organizations, including posters in English and Spanish, social media assets, yard signs, a Powerpoint deck, and more. All of these assets can be personalized and are available on the Alabama 2020 Census resources page.

Carletta Singleton, Partnership Coordinator for the U.S. Census Bureau’s Alabama division, praised the state’s outreach efforts and encouraged people to continue supporting local efforts. March 12 marks the beginning of the 2020 Census, with online response opening that day. The Alabama census office will pay close attention to participation rates from March through July, and will coordinate with local partners to help increase awareness in low-response regions. Singleton also reminded attendees that the Census Bureau is hiring enumerators through March 30. These temporary jobs start at $14 per hour, and are great part-time work for anyone wanting to help make sure their local community counts. Anyone interested can apply on the 2020 Census website.

As the lead for the Alabama State Data Center (ASDC), the official partnership between the U.S. Census Bureau and the State of Alabama, CBER helps disseminate data locally and coordinate workshops to help communities prepare for the 2020 Census. The analysts at CBER know just how important a successful count is to the state and are doing everything they can to help make sure Alabama Counts!

2020 Economic Outlook

• January 15th, 2020

2020 Economic Outlook Conference Review

The Center for Business and Economic Research (CBER) held the 2020 Economic Outlook Conference January 9, 2020 at the Capital City Club in Montgomery. Attendees from all over the state gathered to network and get some perspective into what 2020 might have in store for the state. Speakers included several CBER staff members, as well as David Altig, Executive Vice President and Director of Research at the Federal Reserve Bank of Atlanta, and David Bronner, Chief Executive Officer of the Retirement Systems of Alabama. The presentations from the conference are now available on our CBER’s website on the Alabama Economic Outlook page, offering a chance to review some of the very interesting perspectives shared this year. Thanks to all who attended this year’s conference, and we hope that if you weren’t able to make it this year, you’ll join us for 2021.

Alabama Job Growth Picking Up, Economic Forecast from UA’s CBER Improves

• July 24th, 2019

Recent numbers indicate that Alabama job growth may finally be picking up from the slow pace seen since the last recession.  The state added 31,600 jobs between September 2013 and September 2014.  That’s one of the highest rates of job growth during a 12-month period since the U.S. economy fell into recession in December 2007.

Job gains were spread across most sectors.  Goods producing businesses added 11,000 workers, including 7,900 in manufacturing.  Firms producing transportation equipment, particularly motor vehicle parts, and primary and fabricated metals saw the largest employment growth.  With improvement in residential and commercial real estate markets, the construction sector is rebounding.  The addition of 2,800 construction jobs in the past year includes 1,700 in building construction.

Payrolls in the state’s services sector grew by 20,600 between September 2013 and September 2014.  Food service and drinking places added 10,000 workers, professional and business services gained 7,900, and educational services added 1,900.  However, relatively sluggish consumer spending and demand conditions are hurting retailers, who shed 2,000 jobs over the past year.  In the government sector, federal employers cut 1,000 jobs, while the state added 500 and local governments gained 1,600 jobs.

Economists from the Center for Business and Economic Research in UA’s Culverhouse College of Commerce have raised their annual employment forecast for 2014.  The state should create about 25,000 to 30,000 new jobs this year, a gain of around 1.1 percent that compares to just 0.5 percent in 2013.  Job growth is expected to be somewhat stronger in 2015.

Inflation-adjusted Alabama GDP is expected to increase by about 1.5 percent in 2014, followed by stronger growth of around 2.3 percent for 2015.  However, the concentration of job gains in sectors of the economy that pay relatively low wages and/or hire temporary or part-time workers will likely contribute to subdued growth in income tax collections and relatively weak consumer demand.

Alabama business executives remain optimistic about their prospects for the fourth quarter of 2014.  CBER’s Alabama Business Confidence Index™ (ABCI) slipped 1.3 points to 54.2, indicating growth at a slightly slower pace than in the third quarter.  The state’s business community is, however, more optimistic than a year ago when the ABCI reading was 51.9.  Panelists continue to have a more positive outlook for the state than the national economy.  For fourth quarter 2014, confidence in the Alabama economy registered 56.4, while the U.S. outlook reading was 51.6.

State tax revenues for FY2014, which ended in September, totaled $9.4 billion, up 1.3 percent from the previous fiscal year.  Sales tax revenues rose 2.6 percent to $2.1 billion, while corporate income tax receipts increased 4.2 percent.  Individual income tax revenues fell a slight 0.04 percent to $3.8 billion.  Appropriations to the Alabama Education Trust Fund increased 2.1 percent compared to FY2013 and General Fund appropriations were up 1.0 percent.  CBER forecasts tax revenue growth of 1.5 to 2.0 percent for FY2015.

Alabama exports totaled $9.673 billion during the first half of 2014, just below the same period in 2013.  Exports to Canada were down slightly, while China, the state’s second largest trading partner, saw an increase.  Shipments of transportation equipment rose by $215 million to total around $4.3 billion.

Alabama Job Growth Continues, Economic Forecast from UA’s CBER Updated

• July 24th, 2019

Recent numbers indicate that Alabama job growth continues its slow but solid pace.  The state added 24,500 jobs between October 2015 and October 2016.

Most of job gains were in services providing firms that added 20,700 workers.  Employment levels within goods-producing firms also rose, by 3,800.  Despite an improvement in both residential and commercial construction activity in the state, overall employment in construction-related firms fell by 2,200 over the twelve-month period ending in October 2016.  Meanwhile, manufacturing industries in the state gained 6,500 net new jobs: durable goods manufacturers added 2,200 jobs while producers of nondurable goods added 4,300.

Among service-providing firms, job gains were predominantly associated with retail trade that added 9,400 workers, mainly in general merchandising stores.  Government entities added 5,300 jobs, financial activities 5,200, professional, scientific and technical services added 4,200, and healthcare and social assistance sector added 2,600 jobs.  Payrolls in the wholesale trade sector lost 2,400 workers while the accommodation and food services industry lost 1,200.

Economists from the Center for Business and Economic Research in UA’s Culverhouse College of Commerce have kept their annual employment forecast for 2016 unchanged.  The state should create about 20,000 to 25,000 new jobs this year, a gain of around 1.0 percent that compares to 1.2 percent in 2015.  Job growth is expected to be somewhat weaker in 2016.

Updated forecast for inflation-adjusted Alabama GDP predicts an increase of about 1.4 percent in 2016, up from 2.3 percent in 2015.  The concentration of job gains in sectors of the economy that pay relatively low wages and/or hire temporary or part-time workers will likely contribute to subdued growth in business spending and relatively weak consumer demand.

Even with a weaker state economic growth expected in 2016, tax receipts should continue to rise.  An increase of about 1.5 percent is forecasted for fiscal year 2017.  Total tax revenues were up 1.2 percent in FY2016 ending in September, totaling about $9.9 billion.  Appropriations to the Alabama Education Trust Fund were up by 0.4 percent, totaling $6.1 billion during that fiscal year.  Annual total appropriations to the state’s General Fund were down 0.7 percent to approximately $1.8 billion in FY2016.

State exports rose by $778.1 million to $10.2 billion during the first six months of 2016 compared to the same period in 2015.  Canada remained the state’s largest export market with exports totaling $4.1 billion in 2015.  Transportation equipment manufacturing continues to be the state’s largest export sector.  These exports rose to $5.4 billion during the first six months of 2016, up by $1.2 billion from the same period a year ago.

Business Executives Rank Balanced State Budget and Education the Top Issues Facing Alabama

• July 24th, 2019

Business executives in Alabama believe education and workforce training is the top issue currently facing the state. Education and workforce training ranked second in the 2015 survey and was one of the most significant shifts in rankings from the previous year.

Business executives are surveyed annually by the Center for Business and Economic Research in The University of Alabama’s Culverhouse College of Commerce on various topics related to issues facing the state and their respective companies. More than 104 business executives participated in the latest survey in November 2016. The survey has been conducted since 2013 and asks for opinions of the Alabama Business Confidence Index™ (ABCI) panelists.

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

In issues affecting companies directly, business executives ranked “economy in general” their top issue, which ranked fourth in the 2015 survey. Business leaders specifically mentioned the growth of the state and national economy, consumer confidence and a slow economic recovery.

Government regulations and taxes ranked closely to the economy in general in the individual company portion of the survey. Workforce and company finances and development were the third and fourth-ranked issues facing companies.

Each quarter, business executives across Alabama take the ABCI survey. Seventy-one percent of ABCI panelists use the results as a general indicator of local or regional economic outlook. Nearly 53 percent of business executives also compare personal projections to others’ viewpoints, and 43 percent use the ABCI results as a background information for estimating future trends. Additionally, almost 30 percent of business executives share results with others and 24 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 2017 survey March 1-15.

Business Confidence Remains High Moving into Third Quarter

• July 24th, 2019

Business confidence registered at 61.6 in the third quarter 2017 Alabama Business Confidence Index TM (ABCI) survey conducted by the Center for Business and Economic Research at the University of Alabama’s Culverhouse College of Commerce.

The ABCI is compiled from a quarterly survey sent to business leaders throughout the state gauging their expectations for the coming quarter compared with the current. The six component indexes that make up the ABCI reflect panelists’ expectations for industry sales, profits, hiring, and capital expenditures as well as their forecasts for the statewide and national economies. An index value above 50 indicates a positive outlook, and the higher the index, the more confident the economic outlook.

In the third quarter 2017 survey, the ABCI decreased 3.6 points from Q2 2017’s ten-year high to reach 61.6. This is the third consecutive quarter that the ABCI has registered levels above 60, while the average for the last five years is 54.3. This suggests expectations for economic growth have been increasing significantly since the first quarter of 2017, and though the actual index value has decreased this quarter, many business leaders expect continued growth in the third quarter of 2017.

In general, Alabama business leaders are continuing to forecast a strong Alabama Economic Outlook, with the index only losing 3.4 points to remain high at 64.2 this quarter. In Q2 2017, the Alabama economy index reached a ten-year high of 67.6, and in this quarter, 59.6 percent of business leaders throughout the state expect even better statewide economic conditions compared to Q2 2017. Exactly one third expect conditions to remain the same in the coming quarter, and only 7.0 percent expect worse conditions than were seen in the previous quarter. The Alabama Economic Outlook decreased slightly in the four metro areas but remained very confident with the lowest index value in Birmingham-Hoover registering 61.5 and the highest confidence for statewide economic growth compared to the previous quarter occurring in Montgomery with an index of 65.5.

In the Q3 2017 survey, all but one of the industry ABCIs registered above 50, indicating overall expectations for growth in the coming quarter. Many of the industry ABCIs were very high last quarter, so most ABCI values decreased from the previous quarter’s levels but remained positive. Five of the nine industry categories had ABCIs above 60, showing high levels of confidence for the third quarter of 2017, and only retail trade had an ABCI below 50. Manufacturing had the highest ABCI with an index of 68.1 after only decreasing 0.1 points from its Q2 2017’s ABCI. Panelists in manufacturing led in confidence in with the highest values in all component indexes, indicating high expectations for continued industry growth moving into the third quarter. Business confidence in retail trade fell 9.5 points this quarter, making it the lowest industry ABCI at 46.5. Panelists in retail trade expect a slowdown in hiring, profits and sales compared to the second quarter’s levels of growth.

Business leaders in Alabama’s four largest metro areas continue to respond optimistically, with all metros forecasting growth in the third quarter of 2017. ABCI Montgomery and ABCI Huntsville show the strongest confidence with overall index scores above 62, and ABCI Mobile was not far behind with an index reading of 61.9. Even the lowest metro ABCI, which was recorded in Birmingham-Hoover, remained high at 59.1 this quarter.

Alabama firms expect growth to continue with moderately strong confidence moving into the third quarter of 2017. All three size categories had ABCIs between 60 and 65 and optimistic forecasts for national and statewide economic growth. For the second consecutive quarter, mid-sized firms, those with 20 to 99 employees, have the highest ABCI at 64.8 even after a 1.9-point decrease from the previous quarter’s index. Mid-sized businesses have the highest levels of confidence in all four component indexes: sales at 67.7, hiring at 64.6, profits at 64.1, and capital expenditure at 62.0. Small firms have high confidence in increased sales compared to Q2 2017, and large firms expect sales and capital expenditures to grow with moderately high confidence in the coming quarter.

Celebrating Alabama Veterans by the Numbers

• July 24th, 2019

TUSCALOOSA, Ala. — In honor of Veteran’s Day, UA’s Center for Business and Economic Research  compiled some interesting statistics about veterans in Alabama. Veterans make up a significant portion of Alabama’s population, with about 9.8 percent of Alabama’s population identifying as a veteran,  according to the U.S. Census Bureau’s 2011‐2015 American Community Survey estimates. Data from the  U.S. Department of Veteran Affairs estimates about 370,000 veterans live in Alabama as of September  30, 2017. By examining the demographic characteristics, educational attainment, and entrepreneurship  of veterans in Alabama, we can appreciate the diversity of veterans and the impact they have on their  local communities.

Alabama veterans live throughout the state, but there are several counties that seem to be favorites for  those who served in the armed forces. According to the U.S. Census Bureau’s 2011‐2015 American  community Survey (ACS) estimates, Dale County has the highest percentage population of veterans at  18.3 percent. Coffee County follows closely, with 17.7 percent of its population identifying as veterans.  Russell, Autauga, and Baldwin counties all have veteran populations larger than 12.0 percent of their  total population.

Looking at the number of veterans living in a county, we see many veterans living in the more populated  counties. According to the same ACS data set, Jefferson County has the largest population of veterans in the state, with about 42,000 veterans calling the county their home. Madison County also has a  significant population of veterans (33,094), as does Mobile County (30,686). Baldwin and Montgomery  counties both have large veteran populations at 19,608 and 18,656, respectively.

Demographic Characteristics 

About a fifth of Alabama veteran population in 2017 are 17 to 44 years old, according to the U.S.  Department of Veteran Affairs. More than a third or 36.3 percent are 45 to 64 years old, 37.2 percent are 65 to 84 years old, and 6.4 percent are 85 and over. Most of veteran population in the state are men  (89.4 percent) while 10.6 percent are women.

According to the U.S. Census Bureau’s ACS data, 21.4 percent of Alabama veterans identify as Black or  African American; 0.7 percent identify as American Indian or Alaska Native alone; and a 75.9 percent majority of veterans living in Alabama identify as White alone. Additionally, 1.5 percent of Alabama  veterans identify as Hispanic or Latino of any race.

Educational Attainment

In Alabama, veterans tend to be more educated than nonveterans. Using estimates from the U.S. Census  Bureau, you can see that a greater percentage of veterans than Alabama’s nonveteran population have  at least a bachelor’s degree, and a larger portion of the veteran community has some college or  associate’s degree than the nonveteran population. Additionally, a smaller percentage of veterans have  less than a high school graduate’s level of education than the nonveteran population.

Entrepreneurship 

According to the most recent U.S. Census Bureau’s Annual Survey of Entrepreneurs (2015), among  66,691 Alabama firms, 9.6 percent or 6,425 were veteran‐owned and 3.3 percent or 2,201 firms were  equally veteran‐/nonveteran‐owned. Veteran‐owned firms employed 68,669 people and had an annual  payroll of almost $2.5 billion. Firms that were equally veteran‐ and nonveteran‐owned employed 20,946  people and had an annual payroll of $562.2 million.

Firms in educational services had the largest share of veteran‐owned firms: 16.4 percent or 117 out of  713 firms. The largest share of equally veteran‐/nonveteran‐owned firms was in mining, quarrying, and oil and gas extraction sector, with 14.3 percent or 17 out of 119 firms. Retail trade industry had the  largest number of veteran‐owned firms: 1,103 companies. The largest number of equally veteran‐ /nonveteran‐owned firms was also in retail trade, with 362 companies.

More data on veteran population are available for all Alabama counties from the Census Bureau’s 2011‐ 2015 American Community Survey.

Contact: Viktoria Riiman, Socioeconomic Analyst, Culverhouse College of Commerce, Center for Business  and Economic Research (CBER), 205‐348‐3757, vriiman@cba.ua.edu; Susannah Robichaux,  Socioeconomic Analyst, Culverhouse College of Commerce, CBER, 205‐348‐3781,  scrobichaux@cba.ua.edu

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