Alabama’s economy is projected to maintain its current pace throughout the third quarter of 2023, according to business leaders — inspiring new optimism on top of national cautionary trends.
That assessment was outlined by the University of Alabama’s Center for Business and Economic Research (CBER) this month, citing the national economy as a lone uncertainty holding back full-fledged optimism.
Their latest Alabama Business Confidence Index, taken in early June, was nearly neutral, indicating expectations for an overall continuation of last quarter’s economic performance.
For the first time since the second quarter last year, five of the six component indexes that go into the overall ABCI reflect business leaders are neutral or mildly positive. The only negative index is the U.S. economic outlook, a sour national expectation they’ve reported consistently for nearly two years.
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ABCI is gathered from a broad group of business executives across the state with six key indicators like sales, profits, hiring and capital expenditures.
Those leaders are mostly positive about the chance of increased sales this quarter, and they remain optimistic about hiring more workers this quarter
“Earlier in the year, most businesses were anticipating a recession, but now there is a good chance the Federal Reserve might be able to pull a soft landing of slower growth without becoming a full-blown recession,” said Ahmad Ijaz, CBER executive director and director of economic forecasting.
“With the rate of inflation slowing down, we may be towards the end of Fed rate hikes, which lowers the cost of doing business for most firms. That makes these firms a bit more optimistic about the economy going forward.”
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The ABCI for the third quarter of 2023 is 49.7, rising for the second consecutive quarter after reaching a post-pandemic low for 45.7 in the first quarter of this year. An index over 50 indicates a positive forecast compared to the previous quarter, and the closer the number is to 100, the more confident the forecast.
This quarter, six of the nine industry groupings had an index above 50 showing a positive outlook for their own industry’s sales, profits, hiring and capital expenditures. Only two industries had a positive outlook in the first quarter of the year, and four last quarter.
Of the six metro areas in the state tracked in the survey, only Huntsville has a positive outlook for its economy, with an index of 55.1. The Mobile area had the most negative outlook with an index of 43.
A breakdown of all forecasts by sector is available on the statewide ABCI report.
Grayson Everett is a staff writer for Yellowhammer News. You can follow him on Twitter @Grayson270
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