News and Announcements
Executive Summary—Third
Quarter 2009 Alabama Business Confidence Index®
The Alabama Business Confidence Index (ABCI), a quarterly
gauge of Alabama business sentiment conducted by the Center for
Business and Economic Research at The University of Alabama, announces
its third quarter 2009 results.
Key findings of the third quarter ABCI include:
- Business confidence posted the largest quarterly gain in the survey’s
almost 8-year history. Still, the economy is not expected to turn
the corner in the third quarter, as indicated by an ABCI of 46.0.
- Of the six variables that are equally weighted in calculating
the ABCI, only sales passed the threshold of 50 this quarter.
With a component index of 50.3, sales could see a very modest
increase. All six components of the index rose by double-digits
on the third quarter survey.
- ABCI panelists do not expect the U.S. to pull out of recession
in the third quarter. However, a component index value for the
national economy of 45.1 indicates that the sharp drop of the
last several quarters should give way to a moderate decrease.
This supports other recent indications that the pace of decline
is slowing.
- The Alabama economy is expected to experience a moderate decline
in economic activity in the third quarter, with a reading of 48.8
for the state’s component index. Recovery will be uneven
across the state; job losses are particularly hitting many rural
counties hard.
- While trends for sales will vary by industry, on average sales
are expected to grow slightly. Manufacturing and other services
(including healthcare and education) panelists are the most pessimistic
about third quarter sales prospects.
- The forecast is for a moderate decline in profits in the upcoming
quarter, with a component index of 45.0 suggesting that the steep
drop of the first half of 2009 could be over.
- Few Alabama businesses are likely to add to their workforces
in the third quarter; just 12.7 percent of panelists expect to
see job growth in their industry. With most expecting to maintain
the status quo, the hiring component index rose to 43.7.
- Capital spending will continue to be the weakest component
in the third quarter, with an index value of 42.8.
- Impacts of the recession vary across the state’s four
largest metro areas, but none are expected to begin a recovery
this quarter. Panelists in the Montgomery metro registered the
highest ABCI on the third quarter survey at 49.6, followed by
Huntsville at 48.3. At 45.8, the Mobile metro area may have a
little farther to climb. Birmingham-Hoover could take longer to
emerge from recession, with an ABCI of 42.7.
 
Alabama Economic Outlook
2009 Material Now Online
Each year the Center for Business and Economic Research includes
a summary of developments in Alabama’s 11 metropolitan areas
in its Economic Outlook, published in January. Users can now access
the 2009 metro section,
including the write-up of 2008 activity for each area separately.
This is accompanied by a set of tables
comparing the areas. Note that this material was prepared in the
fall of 2008 and that the worsening economic downturn has resulted
in the postponement or cancellation of a number of projects.
The January 2009
conference presentation on the Alabama Economic Outlook by Dr.
Sam Addy, CBER Director, is also available on our site.
Alabama Forecast Tables
Available Quarterly
The Center for Business and Economic Research is now making its
detailed forecast tables of Alabama output and employment by sector
available quarterly. Table releases in January, April, July, and
October are generated by the Center’s Alabama Econometric
Model based on current economic conditions and expectations.
To order the second quarter 2009 forecast tables and pay by credit
card call 205.348.6191 or send a check for $30 payable to The University
of Alabama to: Center for Business and Economic Research, Box 870221,
Tuscaloosa, AL 35487-0221.
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