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.

Survey design

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.

ABCI panelists

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.

ABCI indices

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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