Mobile business leaders’ confidence sags

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MOBILE, Alabama — Alabama and Mobile-area business leaders feel that things aren’t looking up for the economy.

After two quarters of improved optimism, a survey by the University of Alabama’s Center for Business and Economic Research found that executives expect the economy to sink in the third quarter.

The Alabama Business Confidence Index fell to 50.2 statewide, barely above the midpoint of 50 that divides expansion from contraction, and down from 56.8 in the second quarter.

The data was computed from a quarterly poll of about 300 business people that asks whether they expect the national and state economies to expand or contract in the coming quarter, and how they expect sales, profits, hiring and capital spending to change in their own industry.

Executives surveyed in the Mobile area were even less optimistic, with the overall index falling to 48.9 from 55.5 in the third quarter.

“A temporary period of optimism has given way to concerns about a difficult environment created by national and global economic events amid slow or no growth in local economies,” wrote UA analyst Jonathan Law. “An end to economic uncertainty could benefit Mobile’s economy more than most.”

The majority of survey respondents in Mobile, about 43.9, said they believe Alabama’s economy will stay the same in the third quarter. Similarly, the majority expects no change in sales, profits, hiring and capital spending.

Statewide, the majority of business leaders also predicted no change in sales, profits, hiring and capital spending for the third quarter, but forecasts for industry sales and profits both dipped about 7 points from their second-quarter outlooks.

About 40.7 percent of panelists said they expect sales in their industry to stay the same this quarter, while 39.6 percent expect an increase and only 19.8 percent expect sales to shrink.

The Huntsville area had the lowest outlook of Alabama’s four largest cities, at 48.3. Montgomery led the way in optimism, registering a 53.1 reading on the index.

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