Birmingham Metro Area Report

Alabama Business Confidence Index™

Third Quarter 2025

Decreased Confidence leads to Mixed Forecasts in Q3 2025

Business confidence decreased slightly in the Q3 2025 Alabama Business Confidence Index, with the Birmingham ABCI dropping 2.1 points to register at a neutral index of 49.8. A neutral ABCI indicates expectations for an overall continuation of last quarter’s levels of economic activity. Though the overall outlook is neutral for the quarter, the forecasts for the individual component indexes varied. Birmingham panelists are forecasting increased sales this quarter with moderate confidence but are mildly confident that hiring will decrease and conditions in the US economy will worsen compared to last quarter.

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: Birmingham business leaders are forecasting a continuation of last quarter’s economic conditions in Q3 2025 with a neutral index of 50 after decreasing 0.8 points from last quarter.
• US Economy: The US economic outlook remained mildly contractionary this quarter after decreasing 3.0 points from Q2 2025 to register at 45.4, signaling continued expectations for worse overall economic conditions.
• Industry Sales: The metro’s sales index remained expansionary with a moderately confident index of 57.4, only 0.7 points below Q2 2025’s level. This is the sixth consecutive quarter that metro panelists have predicted increased sales with moderate or strong confidence.
• Industry Profits: Birmingham business leaders are expecting industry profits to decrease this quarter compared to their Q2 2025 levels with a mildly confident index of 49.1, a 0.9-point decrease from last quarter’s index.
• Industry Hiring: Birmingham’s Q3 2025 hiring index dropped 4.6 points to register at 45.4, indicating a mild confidence in their contractionary forecast.
• Industry Capital Expenditures: With a mildly confident expansionary index of 51.9, metro panelists are anticipating increased capital expenditures this quarter despite the index decreasing 2.1 points from Q2 2025.

ABCI Birmingham in Context

In Q1 2025, Birmingham business leaders had expansionary forecasts for all six ABCI component index categories, resulting in a strongly confident ABCI of 60.6. The most notable change that quarter was in the US economic index, which had been contractionary since Q4 2021 (the average index was 37.7 over those thirteen quarters) but jumped 22.5 points in the Q1 2025 survey to reach a very strongly confident forecast of 65.0. Those expectations for growth were not sustained though, with Birmingham’s US outlook dipping back into mildly contractionary territory in Q2 and Q3 2025.

The forecasts from Alabama’s metros were primarily neutral, with the ABCIs for Huntsville, Tuscaloosa, and Birmingham all very close to 50, indicating overall expectations for a continuation of last quarter’s levels. In general, panelists in these metros are expecting industry sales to increase and conditions in the US economy to worsen compared to the previous quarter. Montgomery had the highest metro ABCI this quarter at a mildly expansionary 53.7, which is a 5.4-point increase from their mildly contractionary Q2 outlook. Montgomery’s panelists are forecasting growth this quarter in all indexes but hiring. There was not enough participation to include Mobile’s outlook this quarter.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the third quarter 2025 ABCI™ survey. This is the 95th consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the September 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the fourth quarter of 2025.

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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.