Huntsville, Alabama, Outlook and Business Opportunities

April 16, 2011 - PRLog -- The International Monetary Fund took an unusually tough tone with the U.S. in its annual economic outlook, revising down its 2011 growth forecast to 2.8% and warning that the country's debt problems could destabilize the global financial system.

The IMF said in its 2011 World Economic Outlook that the U.S. could once again be the epicenter of global financial woes if the government doesn't soon draft a credible medium-term plan to slash its mountain of debt and bloating deficit.

Addressing the issue is "particularly urgent," it said.

The U.S. Treasury Department said the U.S. deficit and debt are among President Barack Obama's top priorities and that his budget proposals go a long way to meeting the administration's international commitments. Treasury officials acknowledge that it will be a difficult task, but said the government's not shying away.

While there's little risk of a broad-based rise in U.S. government bond rates in the short term, the fund said growing market concerns over the government's ability to finance its obligations means there's a chance of sudden bond rate volatility, especially in risk premiums, which "could threaten global financial stability."

U.S. Treasury officials say there's always risk in bond markets, but based on current bond pricing, the market doesn't share the IMF's concern.

Given emerging markets' exposure to the U.S. dollar, a rise in U.S. bond rates would hit emerging markets particularly hard, the IMF said.

The political challenges of forging cuts in the budget were on display late last week as Republicans and Democrats faced off over this year's spending to the point of a near shut-down of the federal government. And politicians didn't even touch some of the most sensitive issues for voters: raising taxes and axing entitlement spending, two policies the IMF says are vital to address its fiscal problems.

The Obama administration promised the Group of 20 leading economies last year to halve the U.S. deficit by 2013. But given that would require adjusting its balance sheet by about 5% of the country's gross domestic product between 2012-2013, it "will be challenging to implement, especially in an environment of weak growth and elevated unemployment," the IMF said. Such an adjustment would be larger than any two-year move by the government in the past half-century.

The fund said the U.S. is also likely to fail to meet another G-20 commitment, stabilizing the ratio of debt-to-growth by 2016. Instead, the IMF predicts that, unlike the administration's projections, the ratio will rise from its current level of around 72% to more than 110% by 2016.

In Alabama business optimism moved up slightly in the second quarter of 2011, despite weaker outlooks for the U.S. and Alabama economies.  The Alabama Business Confidence Index™ (ABCI) rose 0.8 points to 55.8, indicating that the recovery continues to gain momentum.  ABCI is approaching its prerecession reading of 56.8 from the third quarter of 2007.  Business executives are generally feeling more positive about prospects for their industries in the second quarter.

The Alabama economy index slipped 2.3 points to 57.3, still indicating moderate economic expansion.  About half of panelists expect a better performance in second quarter 2011, but the share thinking the state’s economy will fare worse rose from 13.7 percent on the first quarter survey to 20.3 percent.

Optimism about sales continued to climb, rising 4.1 points to 61.9—a level not seen since third quarter 2006.  Overall, 59 percent of respondents expect sales in their industry to rise this quarter, while just 15.6 percent forecast a decline.  Retailers and the financial sector are the most upbeat, while professional, scientific, and technical service firms are the least.

Business confidence rose sharply among the state’s manufacturing and wholesale and retail trade firms.  Still, panelists in finance, insurance, and real estate are the most optimistic about their second quarter prospects.  The index for professional, scientific, and technical services fell almost 5 points to 49.1, indicating a modest contraction in the industry this quarter.

Confidence indexes for the four largest metros all came in close to the state ABCI of 55.8 this quarter.  Mobile’s ABCI of 57.4 was the highest, down just 0.6 points from first quarter.  The Montgomery metro index rose 2.9 points to 56.8.  Optimism slid 5.8 points to 54.5 in Huntsville as confidence fell sharply among the area’s many professional, scientific, and technical service firms.  Although the lowest reading of the four metros, Birmingham-Hoover confidence improved 2.1 points to 54.3.

Hyundai's Montgomery factory set a monthly production record last month, as 31,730 Sonata sedans and Elantra compact sedans rolled off the assembly lines.

That total is the most the plant's 2,500-plus workers have ever built in a single month since the plant opened in 2005, and it was driven by strong demand for both vehicles.

In March, U.S. sales of the Sonata and the Elantra rose a combined 55 % over the year-ago period and accounted for 68 % of total Hyundai volume.

The plant is projected to produce more than 330,000 vehicles this year, topping its stated annual capacity of 300,000.

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Entrepreneur Magazine's Franchise 500 listing for 2010 ranks ACFN, the only ATM franchise business in the US, #1 in category "Miscellaneous Financial Services".

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About  ACFN

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American Consumer Financial Network (ACFN)
111 W. St. John St
Sixth Floor
San Jose, CA 95113
Tel: 888-794-2236

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ACFN is North Americas only ATM franchise focused on providing ATM services to hotels and other travel and entertainment based businesses. Providing ATM services since 1996, franchised in 2003 with 170 franchises, 1400 ATM Machines in the US and Canada.