While the country continues to deal with the COVID-19 pandemic, business leaders throughout the state of Alabama are expressing measured sighs of relief heading into the fourth quarter of 2020, according to the Center for Business Economics and Research at The University of Alabama.
The Center’s most recent Alabama Business Confidence Index quarterly survey shows business confidence is increasing slightly to 55.2, a 3.4-point increase over the previous quarter, thanks to new innovations and safety measures introduced to lessen the spread of coronavirus.
Business leaders are feeling most confident about improved conditions in the statewide economy, with an index of 59.8 in the fourth quarter, a 3.4-point increase from the previous quarter. Expectations are also positive for the national economy, whose index stands at 57.5 after a 0.4-point decrease, indicating moderate confidence in improved conditions for the U.S. economy compared to the third quarter.
An index over 50 indicates a positive forecast compared to the previous quarter, and the higher the number, the more confident the forecast.
The statewide and national forecasts, along with industry-specific components like sales, profits, hiring and capital expenditures comprise the six indexes that combine to make the ABCI total.
As for individual sectors, wholesale trade and retail trade are the big winners for the fourth quarter, with ABCIs of 65.1 and 62.0, respectively. These high indexes mean business leaders in those sectors feel very confident the fourth quarter will be stronger for them than the previous quarter.
“The data reflects what many of us are seeing out on Main Street: that consumers and businesses are finding ways to navigate returning to life during a pandemic and adjusting to the new normal,” said Susannah Robichaux, one of the center’s staff economists. “That’s not to say that things are back to where they were pre-pandemic, or even close to it, but we can say that business leaders are feeling less uncertainty heading into this quarter.”
The breakdown of all the industry forecasts by sector can be seen in the statewide ABCI report on CBER’s website.
In addition to the statewide ABCI report, CBER also collects ABCI data to write individual reports for Alabama’s major metros areas. These metro reports offer insight into the forecasts for each specific region –– and for the first time, Tuscaloosa is represented in the field.
“We’re proud to introduce Tuscaloosa to our breakout analyses. It’s the fifth largest metro area in the state, and there’s been a lot of demand to get the unique outlook from these business leaders,” said Robichaux.
The Chamber of Commerce of West Alabama is partnering with the Center for Business and Economic Research to encourage local businesses to contribute their outlooks to this unique forecasting tool. The metro reports include a breakdown of the component forecasts and some historical context for the region.
The other metro areas included in the report are Birmingham-Hoover, Huntsville, Mobile and Montgomery.