Tuscaloosa Metro Area Report

Alabama Business Confidence Index™

Fourth Quarter 2025

Tuscaloosa Business Confidence Continues to Rebound in Q4 2025

Business leaders in Tuscaloosa are forecasting overall economic expansion with mildly confident ABCI of 54.0 in the Q4 2025 survey. This is 3.8 points above last quarter’s neutral metro ABCI that was composed of three contractionary and three expansionary component indexes. This quarter, all six of the component indexes are above 50, signaling expectations for growth compared to last quarter, though the levels of confidence in those forecasts varied from moderately confident (industry sales and hiring) to very mild (the US outlook and profits).

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

Tuscaloosa Component Index Analysis

• Alabama Economy: The Alabama outlook grew 5.5 points to register at 54.0 in the Q4 2025 ABCI survey, indicating mildly confident expectations for improved conditions in the statewide economy compared to those seen in Q3 2025.
• US Economy: Tuscaloosa’s Q4 2025 index for the US economy was 51.0, up 3.2 points from last quarter, indicating very mildly confident expectations for an improved US economy this quarter compared to Q3 2025.
• Industry Sales: For the third consecutive quarter, industry sales was Tuscaloosa’s highest component index. Though the index has been expansionary since Q4 2023, confidence levels were mild for the last two quarters. The Q4 2025 index grew 5.3 points to reach 59.0, with almost 50 percent of panelists anticipating increased sales this quarter compared to their levels in Q3 2025.
• Industry Profits: After two quarters of mildly contractionary forecasts for profits from metro panelists, the Q4 2025 index increased by 3.5 points to reach 52.0, indicating a mildly confident expansionary outlook.
• Industry Hiring: Tuscaloosa’s industry hiring is expected to increase this quarter compared to last with moderate confidence. The index increased 3.5 points from Q2’s neutral outlook to register at 55.0 in the Q4 2025 survey.
• Industry Capital Expenditures: The capital expenditures index remained mildly expansionary this quarter, increasing 1.5 points to register at 53.0. Almost 70 percent of panelists expect no change from their Q3 2025 levels of capital spending.

ABCI Tuscaloosa in Context

Tuscaloosa’s ABCI rebounded to a mildly confident 54.0 in the Q4 2025 survey, with expansionary forecasts for all six of the component indexes for the first time since Q1 2025. The metro’s ABCI was a notably confident 58.6 in Q1 2025 (the highest ABCI since Q4 2021), as panelists forecasted improved conditions in the US and Alabama economies and increased industry sales that quarter with strong confidence. That expansionary outlook was not sustained though: the ABCI fell almost 10 points in Q2 2025 due to contractionary forecasts for the Alabama and US economies, and profits. Though those three indexes remained contractionary in Q3 2025, milder confidence in those forecasts resulted in an overall neutral ABCI for the quarter.

This quarter, all five of Alabama’s largest metro areas are forecasting overall growth with mild to moderate confidence. The only contractionary component index of all the metros was Birmingham’s US outlook (43.5), but all of the other component indexes across the metros were expansionary or neutral. All metros but Montgomery are forecasting increased sales with strong confidence, but Mobile led in expansionary expectations for the US and Alabama economies. As a result, Mobile had the highest ABCI this quarter.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the fourth quarter 2025 ABCI™ survey. This is the 96th consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the December 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the first 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 Chamber of Commerce of West Alabama.

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