News and Announcements
Executive Summary--Second
Quarter 2008 Alabama Business Leaders Confidence Index®
The Compass Bank Alabama Business Leaders Confidence Index
(BLCI), an economic survey of Alabama business leaders, second
quarter 2008 results have been released.
Key findings of the Alabama BLCI include the following:
- The overall BLCI dropped 4.3 points to 42.9.
- This quarter’s survey is the first time the state economy
and industry sales components have fallen below 50. Fifty marks
the division between improving and deteriorating economic conditions.
- Seventy-three percent of Alabama business leaders expect the
national economy to worsen in the second quarter.
- At a reading of 44.8, the profit component index is 2.6 points
below its first quarter value.
- A sizeable 38.4 percent of panelists expect to cut back on
hiring during the second quarter, up from 28.0 percent in the
first quarter.
- Expectations for capital expenditures saw the biggest decline
of the four industry component indexes in the second quarter of
2008; its value of 43.2 was down 5.5 points from the previous
quarter.
- With an index of 52.7, Mobile was the only one of the four
metro areas tracked by the survey anticipating stronger growth
during the second quarter, while Huntsville’s BLCI fell
7.7 points to 45.6.
- The Birmingham metro area index declined 5.9 points to 40.
- Montgomery had the lowest reading for six of the seven survey
components, including the lowest BLCI reading at 36.6.
- The BLCI quarterly survey asked panelists from across Alabama
about their decision making process during uncertain times. Almost
half of those surveyed said they will scale back capital spending,
while 47 percent of panelists explained that they are cautiously
optimistic about the approach they are taking to manage their
business amid this downturn. Finally, 42.2 percent reported making
realistic projections and goals as the hardest part of running
a company during this time. Another 21.7 percent found managing
increases in labor, energy and other operating cost to be the
most difficult challenge.
The Alabama BLCI is a collaborative project between Compass Bank
and the Center for Business and Economic Research. The index represents
the combined expectations of executives from a variety of businesses
across the state—those who are closest to the pulse of the
local economy and beyond. For additional details, please visit http://www.blci.com/alabama/.
This is the 26th consecutive quarter that Compass and the Center
for Business and Economic Research at The University of Alabama
have conducted the survey of Alabama business leaders. Panelists
represent a wide range of small, midsize, and large companies. Participants
are from all major industry groups across Alabama's 11 metropolitan
areas and many nonmetro counties.
Alabama Economic
Forecast Released
The Center for Business and Economic Research (CBER) presented
a forecast of moderate growth in the Alabama economy in 2008 at
its annual Economic Outlook Conference, held January 17 in Montgomery.
About 170 attendees listened to expectations for a 2.2 percent increase
in the state’s real GDP during the year and for the creation
of almost 21,700 jobs, a 1.1 percent gain.
New industrial, school, medical, and BRAC-related projects under
construction in 2008 should help that sector weather the effects
of the slowdown in residential housing in the state. Growth in professional,
scientific, and technical jobs in sectors including biotech, national
defense, and aerospace, as well as new auto supplier jobs, will
boost the Alabama economy during the year. Export gains and new
business at the Alabama State Docks will also help the state avoid
the downturn that is expected nationally during at least the first
two quarters of 2008.
However, the state faces challenges on several fronts during 2008
including: continuing layoffs and plant closings in textiles and
apparel; below trend tax revenues given slow growth in consumer
spending and income; providing a workforce with the education and
skills needed by new and existing businesses; and having adequate
funding available for incentives to attract new industry.
The Alabama Economic Outlook 2008 can be ordered from the
Center for Business and Economic Research for $30. The book contains
forecasts for the state’s economy by sector, tax revenue forecasts,
and summaries of economic activity in the state’s metropolitan
areas. A companion set of detailed forecast tables is also $30.
Click here for ordering information.
The January 17, 2008 Economic Outlook Conference included presentations
of both the United States and Alabama economic outlooks, as well
as a keynote speech by Dennis Lockhart, president and CEO of the
Federal Reserve Bank of Atlanta. See what the press reported from
the conference at the links below:
From Bloomberg News posted on al.com by Birmingham News
http://blog.al.com/businessnews/2008/01/atlanta_fed_chief_says_more_in.html
From Reuters
http://www.reuters.com/article/gc06/idUSN1719666920080117
From the Birmingham Business Journal
http://www.bizjournals.com/birmingham/stories/2008/01/14/daily28.html?jst=b_ln_hl
From the Mobile Press-Register
http://www.al.com/business/press-register/index.ssf?/base/business/1200651362285480.xml&coll=3
From the Tuscaloosa News
http://www.tuscaloosanews.com/article/20080118/NEWS/825006919/1007
From the Gadsden Times
http://www.gadsdentimes.com/article/20080118/NEWS/801180331/1017/NEWS
From the Florence Times Daily
http://www.timesdaily.com/article/20080118/NEWS/801180331/1011
CBER
News Service
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