Alabama business leaders show concern for economy in recent survey
The most recent results of the Alabama Business Confidence Index (ABCI) show local business leaders in Alabama are concerned for the future of the economy.
The ABCI is a survey created by the Center for Business and Economic research “to put the finger on the pulse of the local economy in a timely way,” according to Susannah Robichaux, a socioeconomic analyst for The University of Alabama Center for Business and Economic Research.
The ABCI is made up of four industry indicators including sales, profits, hiring and capital expenditures, as well as two general economic indicators including economic indicators in the United States and economic indicators in Alabama.
Findings from the most recent ABCI are trending negatively for the coming quarter. This downtrend is on the heels of a more positive previous quarter.
Robichaux credited these recent negative findings to skepticism Alabama business leaders may have about the national economy.
“We've seen this relationship show up, where as long as the Federal Reserve is increasing interest rates, Alabama business leaders are expecting a worse outcome for the U.S. economy each quarter,” Robichaux said.
This negative national outlook has its affects locally, and may continue in the future, according to Robichaux.
“The index for the U.S. economy lost a few points and was strongly, strongly negative. And then, the Alabama economy and industry profits were very mildly negative,” Robichaux said. “So, there's a chance that those will decrease in the coming quarter.”
Though recent findings are trending negative, Robichaux said local business owners need not panic.
“The industry indicators are not bad,” Robichaux said. “Some of them are somewhat positive overall. Alabama business leaders are expecting increased sales next quarter, and hiring is somewhat positive. But the forecast for the U.S. economy being as negative as it has been for nine quarters has had a very strong downward pull on the overall ABCI.”
Robichaux said the Alabama economic indicators are trending downward only slightly, and leaders are more concerned about how the national economy will affect Alabama.
“What this means for Alabama is not that Alabama businesses are necessarily struggling right now. But it means that they're a little bit wary of the U.S. economy, which does have implications for their own for the local economy,” Robichaux said.
These ABCI reports are all available for free on CBER's website with individual reports for Alabama's five largest metro areas, including Birmingham, Huntsville, Mobile, Montgomery, and Tuscaloosa, in addition to the statewide report that includes a breakdown by industry and firm size.
For more information about the ABCI visit this link.