- Associated Press - Tuesday, January 17, 2017

MONTGOMERY, Ala. (AP) - It may tough for economists to predict how a Donald Trump White House will affect Alabama, but the state’s business executives seem to have no such problem.

A survey taken after the election showed that optimism among Alabama business leaders surged to its highest level since 2005. It was also the largest jump in the quarterly survey’s 15-year history.

“Impact is very hard to predict,” said Ahmad Ijaz, senior research economist for the Center for Business and Economic Research at the University of Alabama. “But you can see the optimism that businesses feel for this election. That’s definitely reflected in (the numbers).”

The center compiles the Business Confidence Index using an online poll of business leaders to gauge their feelings about the quarter ahead, from changes in hiring to sales expectations. The index rose from 52.6 just before the election to 62.7 just after Trump’s win. Anything over 50 indicates growth ahead.

A separate, national study of small business owners found an even bigger jump in optimism after the election. There was a massive 38-point increase in owners who expect better business conditions, according to the monthly Index of Small Business Optimism by the National Federation of Independent Business. That sent the study to its highest level since 2004.

Rosemary Elebash, Alabama director of the National Federation of Independent Business, said those national trends are playing out in Alabama, as well.

“Small businesses aren’t going to invest in new equipment or facilities or create jobs unless they’re optimistic about the future, so these results are very encouraging,” she said.

Of course, optimism doesn’t always mean something good’s about to happen.

Auburn Montgomery economist Keivan Deravi said while Trump is talking about lowering corporate taxes, removing regulations and other business-friendly actions, it would take a while to make all of that a reality. And that’s assuming Congress is on board with everything.

“Saying I want to do something and getting it done are two different things,” Deravi said. “We’re not going to see any (impact) until late 2018, if then.”

Forecasts from other Alabama economists are similarly guarded.

Ijaz and his colleagues at the Center for Business and Economic Research are predicting a slight uptick in the pace of growth for Alabama’s economy this year. Meanwhile, they’re predicting very little change in the rate of job growth over the next two years.

The job forecast is one area where economists and business leaders seem to agree. Even with the unprecedented jump in CBER’s post-election confidence survey, executives were less optimistic about hiring than they were about growth in any other category.

Deravi said that’s because labor is the most costly part of doing business.

“You want to be 100 percent sure of the economy before you start adding employees,” he said.

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Information from: Montgomery Advertiser, https://www.montgomeryadvertiser.com

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