Birmingham Metro Area Report

Alabama Business Confidence Index™

First Quarter 2026

Mildly Confident Expansionary Forecast

Business leaders in Birmingham are still anticipating overall economic expansion with a mildly confident ABCI of 51.7 in the Q1 2026 survey. This is 1.9 points below their ABCI from last quarter as metro panelists continue to forecast growth in four of the six component indexes, but with more subdued confidence. Three component indexes changed by more than five points in the Q1 2026 survey: the U.S. outlook grew by 5.5 points to become only mildly contractionary; hiring decreased 5.2 points to return to a moderately contractionary index; and the capital expenditures index decreased 7.7 points from a moderately confident to very mildly confident outlook.

Index above 50 indicates positive outlook as compared to last quarter.
Index below 50 indicates negative outlook compared to last quarter.

Birmingham Component Index Analysis

• Alabama Economy: The Alabama outlook decreased 1.2 points to register at 53.1 in the Q1 2026 ABCI survey, as panelists continue to forecast improved statewide economic conditions compared to last quarter with mild confidence.
• US Economy: Birmingham’s Q1 2026 index for the US economy was 49.0, up 5.5 points from last quarter. Though this is still a contractionary outlook, it is much closer to the neutral index.
• Industry Sales: Expectations for increased industry sales in the Birmingham metro remained moderately confident, despite the index decreasing 3.6 points from Q4 2025 to reach 56.2. The metro’s sales index has been above 55 for the last eight quarters, indicating sustained expectations for sales growth.
• Industry Profits: Birmingham’s profits index grew 0.8 points to reach 56.2 in Q1 2026. This is the metro’s second consecutive quarter with a moderately confident expansionary outlook.
• Industry Hiring: Birmingham panelists expect to decrease hiring this quarter compared to last, with a moderately contractionary index of 44.8. This index has oscillated between neutral and contractionary levels since Q2 2025.
• Industry Capital Expenditures: After spiking up to 58.7 in the Q4 2025 ABCI survey, the capital expenditures index decreased 7.7 points in the Q1 2026 survey, returning to milder levels of confidence.

ABCI Birmingham in Context

Since Q2 2024, Birmingham’s ABCI has generally fluctuated between mildly expansionary and mildly contractionary forecasts with the exception of Q1 2025’s strongly expansionary forecast. By component index, the metro’s U.S. outlook has exerted a downward pull on the overall index since Q4 2021, apart from a strongly confident expansionary outlier in Q1 2025. On the other hand, Birmingham’s sales index has been consistently expansionary over the last two years, averaging 58.1. The profits and capital expenditure indexes have mostly been expansionary or neutral, each with only one contractionary index since Q2 2024. The metro’s hiring has been more variable in the last two years, oscillating between contractionary, expansionary, and neutral forecasts each quarter.

For the second consecutive quarter, all five of Alabama’s largest metro areas have an expansionary outlook, though the level of confidence in those forecasts varies significantly. Mobile had the highest metro ABCI at 64.3, Tuscaloosa had a moderately confident outlook of 56.9, while business leaders in Montgomery, Huntsville, and Birmingham all had much milder confidence in their expansionary forecasts. More details can be found in the Statewide ABCI report.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the first quarter 2026 ABCI™ survey. This is the 97th consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the March 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the second quarter of 2026.

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This report was produced in partnership between the Center for Business and Economic Research at the The University of Alabama’s Culverhouse College of Business and the Birmingham Business Alliance.

Analysis provided by Susannah Robichaux, Socioeconomic Analyst, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.