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Alabama Business Optimism Improves at Onset of 2016

Business confidence rose to 53.0 on the first quarter 2016 Alabama Business Confidence Index™ (ABCI) survey, conducted by the Center for Business and Economic Research in UA’s Culverhouse College of Commerce. The index increased 1.8 points but closed at its second lowest level since the first quarter of 2014. Panelists are now less optimistic than a year ago when the ABCI registered 57.4. An index value above 50 indicates positive outlook.

Panelists continue to see expansion in the Alabama economy, but are less optimistic about the national economy. The outlook for the state economy rose to a moderately confident 54.6, while the national economy index remained below the neutral mark at a slightly negative 49.2.

Every industry indicator moved higher on the survey and all remain positive. The sales index again tops the list at 55.8, while expectations for capital expenditures, hiring, and profits all rose to easily positive readings.

Overall, firms in manufacturing, professional services, miscellaneous services and healthcare are the most optimistic this quarter, all posting index levels of 55.0 or more. Retailers, however, continue to see the economic environment as a negative.

The largest four metro areas all posted positive readings, even as confidence declined by almost a point in Birmingham – confidence increased in Huntsville and Mobile, while Montgomery confidence remains the same as last quarter. Mobile enjoys the highest confidence among the large metros with an index of 57.3.

Business executives expect the state’s economy to continue its expansion in the first quarter of 2016. At 54.6, the index is up 2.6 points from last quarter, but down 2.8 points compared to a year ago. Almost 33 percent of panelists expect stronger economic growth this quarter and approximately 53 percent expect the state’s economy to perform about the same as last quarter.

The mixed sentiment of ABCI panelists in a broad range of industries supports the recent preliminary 2016 forecast from the Center for Business and Economic Research. CBER expects the state’s economic growth to slow from 2.4 percent in 2015 to 2.3 percent this year. Employment growth is forecasted to decelerate from around 1.2 percent in 2015 to 1.0 percent in 2016, while tax revenues are forecasted to rise 3.3 percent in FY2016 compared to last year’s 4.0 percent increase.

Report:  Results of the first quarter 2016 ABCI survey are available at  The survey, which is in its 15th year, was completed online December 1-15 by 259 Alabama business executives.

Media Contacts: 

Gregg Bell, Ph.D., Socioeconomic Analyst, 205-348-3781,

Viktoria Riiman, Socioeconomic Analyst, 205-348-3757,

February 1, 2016


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