Origins of ABCI™ Survey
The Center for Business and Economic Research (CBER) launched the Alabama
Business Confidence Index (ABCI) survey in the third quarter of 2009.
It is a continuation of the Business Leaders Confidence Index (BLCI) survey
that was initiated by Compass Bank in partnership with CBER for the first
quarter of 2002 and terminated after the second quarter of 2009. The ABCI
provides a seamless transition from the BLCI; thus, the seven and a half
years of BLCI survey history can be compared with ABCI results.
The ABCI survey is forward-looking and asks during the month prior to
a new quarter about expectations for change from the current to the upcoming
quarter. There are four industry indicators: sales, profits, hiring, and
capital expenditures. The survey includes two general economic indicators:
economic conditions in the United States and economic conditions in Alabama.
Calculation of survey results
A five-part scale is used for the industry indicators: strong increase,
moderate increase, no change, moderate decrease, strong decrease. The
economic indicators also employ a five-part scale, but the wording is:
much better, somewhat better, remain the same, somewhat worse, much worse.
These choices are weighted +2, +1, 0, -1, -2. Then the overall ABCI =
((S responses / # surveys) + 12) / 24*100. Thus, the ABCI range is 0 to
100, with 50 the neutral point. An index is similarly calculated for each
of the six components of the survey.
Participation is voluntary; new panelists first register on the ABCI
website and all panelists sign in each quarter to take the survey. The
number of business executives completing the survey averages around 300.
The survey has historically targeted C-level executives: the most common
titles are President, Owner, CFO, CEO, and Vice-President.
Each quarter the overall ABCI is calculated and a component index is
computed for the six variables on the survey. A composite ABCI is also
derived for various industry sectors: manufacturing, construction, retail
trade, wholesale trade, health care services, professional/scientific/technical
services, other services, FIRE, and TIPU. ABCI and component indices are
calculated for the state’s four largest metros (Birmingham-Hoover,
Huntsville, Mobile, and Montgomery). Utilization of these subindices is
dependent on having a reasonable sample size.
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