Birmingham Metro Area Report

Alabama Business Confidence Index™

Third Quarter 2026

Expansionary Forecast Despite Decreased Confidence in Q3 2026 ABCI Survey

Birmingham business leaders are still forecasting growth in Q3 2026 though with milder confidence than measured last quarter, resulting in an ABCI of 52.1. This is 4.3 points below Q2 2026’s moderately confident expansionary outlook of 56.4. Despite decreases to all six of the component indexes in the Q3 2026 ABCI survey, most of Birmingham’s forecasts remained expansionary with mildly confident outlooks. The only contractionary index this quarter was the U.S. outlook, with business leaders forecasting worse economic conditions with very mild confidence.

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 Q3 2026 Alabama economic index had the largest decrease from Q2, falling 9.7 points from a strongly confident expansionary outlook to register at a very mildly confident 50.8. Over half of panelists anticipate a continuation of last quarter’s conditions in the statewide economy.
• US Economy: After registering as mildly expansionary in Q2 2026 for only the second time in four years, the metro’s U.S. outlook decreased to a mildly confident contractionary 49.2 in the Q3 2026 ABCI survey.
• Industry Sales: Despite decreasing 6.3 points, Birmingham’s sales index continues to be one of the metro’s the highest component indexes at 54.2, communicating mildly confident expectations that sales will continue increasing in Q3 2026.
• Industry Profits: Like sales, Birmingham’s profits index was 54.2 in the Q3 2026 survey, as panelists forecast an increase in their industry profits for the fourth consecutive quarter. This is 2.4 points below last quarter’s index.
• Industry Hiring: The Q3 2026 hiring index decreased 1.8 points to remain mildly expansionary at 50.8. Just under 37 percent of panelists expect to increase hiring this quarter, and an equal number expect to continue hiring at last quarter’s rate.
• Industry Capital Expenditures: Expectations for capital expenditure growth were mildly confident in the Q3 2026 survey. The index registered at 53.3 after decreasing 3.3 points from last quarter.

ABCI Birmingham in Context

Birmingham panelists have forecasted overall growth with mild to moderate confidence for eight out of the last ten quarters. Since Q2 2024, the metro’s sales index has been consistently optimistic with an average index of 58. In contrast, expectations for the US economy largely been contractionary, with the index only registering as expansionary twice since Q4 2022. The other component indexes have had more variation in their forecasts over the last ten quarters, often registering as expansionary but occasionally conveying neutral or contractionary outlooks.

For the third consecutive quarter, the ABCIs from four of Alabama’s five largest metro areas were all expansionary. In the Q3 2026 ABCI survey, panelists in Huntsville are forecasting increased sales and profits with strong confidence, while business leaders in Montgomery are anticipating higher sales and improved statewide economic conditions with strong confidence. Business leaders in Tuscaloosa and Birmingham are more conservative in their expectations, with mostly mildly confident expansionary component indexes mixed with neutral or mildly contractionary outlooks for the US economy and industry hiring.** AUTHOR **

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the third quarter 2026 ABCI™ survey. This is the 99th 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 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.

, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.