Alabama Business Confidence Index
Alabama Business Confidence Index™
Second Quarter 2024
Download the Full ReportMildly Confident Expansionary Forecast for Q2 2024
The Alabama Business Confidence Index (ABCI) grew by 4.8 points to reach a mildly confident expansionary index of 54.1 in the Q2 2024 survey. All six component indexes saw increases from their Q1 2024 levels, though the magnitude varied from fairly low increase (2.2 points) to a large leap (9.6 points). Business leaders are forecasting second quarter growth with mild to strong confidence for all of the industry component indexes and the Alabama economy. The only negative index for the quarter is the US outlook, which has been contractionary since Q1 2022.
Second Quarter 2024 Outlook
|
Index above 50 indicates positive outlook as compared to last quarter.
Index below 50 indicates negative outlook compared to last quarter.
Statewide Component Index Analysis
- Alabama Economy: The Q2 2024 statewide economy index increased 2.2 points to reach 53.9 this quarter, indicating mildly confident expectations for better economic conditions compared to last quarter.
- US Economy: Though it remained mildly contractionary (46.7) in the Q2 2024 survey, the US outlook has continued to steadily increase from its low of 29.3 in Q3 2022. This is the eleventh consecutive quarter that the index has been negative, indicating sustained expectations for worse national economic conditions.
- Industry Sales: With over 55 percent of panelists forecasting index sales growth, the sales index is strongly expansionary this quarter, growing an impressive 9.6 points to reach 61.0.
- Industry Profits: After increasing 7.6 points from Q1 2024, industry profits are expected to increase this quarter with a moderately confident index of 55.9. This is a 7.6-point increase from last quarter’s mildly contractionary forecast.
- Industry Hiring: The Q2 2024 forecast for industry hiring remained mildly expansionary at 54.0 after increasing 2.7 points from last quarter.
- Industry Capital Expenditures: After growing 2.9 points from last quarter’s neutral index, capital expenditures are forecasted to increase with a mildly expansionary index of 52.9.
Statewide Response Breakdown
Statewide Response BreakdownParticipants’ responses reported as percentages |
| Much Worse | Somewhat Worse | No Change | Somewhat Better | Much Better | |
|---|---|---|---|---|---|
| Alabama Economy | 0.5 | 18.7 | 47.1 | 32.1 | 1.6 |
| US Economy | 2.1 | 34.2 | 40.1 | 21.9 | 1.6 |
| Industry Sales | 0.5 | 16.0 | 27.8 | 50.3 | 5.3 |
| Industry Profits | 1.1 | 20.3 | 34.2 | 42.8 | 1.6 |
| Industry Hiring | 2.7 | 11.8 | 55.6 | 26.7 | 3.2 |
| Industry Capital Expenditures | 2.1 | 20.3 | 45.5 | 27.8 | 4.3 |
Historical ABCI™ and Industry Component Indexes
Historical ABCI™ and Economic Outlook Component Indexes
CBER’s Forecast for Alabama
The Center for Business and Economic Research is forecasting a 2.0-percent increase in Alabama GDP for 2024, which is only slightly below the forecasted 2.5-percent growth in 2023. Similarly, growth in Alabama employment is expected to slow down a little in 2024, increasing by 1.4 percent compared to 2023’s 1.8 percent. CBER anticipates that the state’s total tax receipts will grow by 1.5 percent this year, which is below the 3.2-percent increase seen in 2023.
Growth Forecasted for Most Metros
Business confidence across Alabama’s metro areas is mostly positive in Q2 2024, with business leaders in all but Montgomery forecasting growth compared to the previous quarter. Tuscaloosa had the highest metro ABCI with a moderately confident 57.1 and a very strongly expansionary industry sales index. Huntsville followed closely with an ABCI of 55.1 for the quarter. Panelists in Birmingham–Hoover and Mobile had mildly confident expansionary forecasts of 53.5 and 52.8, respectively. Montgomery, who had the highest MSA ABCI last quarter at a mildly positive 51.9, dropped almost 6 points to a mildly negative index of 46.1 with contractionary forecasts for all of their component indexes except sales.
ABCI by Metro Area
Metropolitan Statistical Area (MSA): Second Quarter 2024 Outlook |
| Statewide | Birmingham–Hoover | Huntsville | Mobile | Montgomery | Tuscaloosa | |
|---|---|---|---|---|---|---|
| ABCI | 54.1 | 53.5 | 55.1 | 52.8 | 46.1 | 57.1 |
| Alabama Economy | 53.9 | 53.1 | 54.0 | 53.3 | 48.3 | 57.7 |
| US Economy | 46.7 | 44.5 | 48.9 | 43.3 | 36.7 | 50.0 |
| Industry Sales | 61.0 | 62.5 | 61.4 | 58.3 | 51.7 | 65.5 |
| Industry Profits | 55.9 | 56.2 | 56.6 | 56.7 | 46.7 | 58.3 |
| Industry Hiring | 54.0 | 54.7 | 55.9 | 50.0 | 45.0 | 57.1 |
| Industry Capital Expenditures | 52.9 | 50.0 | 53.7 | 55.0 | 48.3 | 54.2 |
Business Confidence Increased for Most Industries in Q2 2024
The industry index only includes panelists’ forecasts for their own industry sales, profits, hiring, and capital expenditures, thus offering unique insight into panelists’ expectations for their specific industries. In Q2 2024, all but two industries had expansionary forecasts. The industry index for professional, scientific, and technical services registered as neutral after decreasing 0.6 points, indicating expectations for an overall continuation of last quarter’s levels of sales, profits, hiring, and capital spending. Business leaders in retail trade were the only industry group to have an overall contractionary outlook in Q2 2024, with moderately to strongly confident forecasts for decreases in all four component indexes. “All other services” had the highest industry index this quarter at 61.5 and strongly expansionary component indexes for industry sales and profits. Business leaders in construction also had a notably confident industry index at 60.6. As a note, “all other services” is the category that includes management of companies and enterprises; education services; arts, entertainment, and recruitment; accommodation and food services; and other services that don’t fit into the survey’s other categories. Retail trade and wholesale trade did not have enough participation in the Q1 2024 survey to calculate individual industry indexes
Industry Component Index: Second Quarter 2024 Outlook |
| Industry Index | Change from Q1 | Sales | Profits | Hiring | Capital Expenditures | |
|---|---|---|---|---|---|---|
| All Other Services | 61.5 | 8.7 | 67.7 | 61.5 | 58.9 | 57.8 |
| Construction | 60.6 | -0.3 | 63.5 | 53.8 | 61.5 | 63.5 |
| Manufacturing | 56.6 | 8.8 | 60.0 | 55.0 | 53.8 | 57.5 |
| Finance/Insurance/Real Estate | 56.1 | 7.2 | 64.4 | 58.3 | 50.8 | 50.8 |
| Statewide | 56.0 | 5.7 | 61.0 | 55.9 | 54.0 | 52.9 |
| Transportation/Information/Utilities | 55.5 | 5.5 | 65.6 | 59.4 | 46.9 | 50.0 |
| Wholesale Trade | 55.4 | 16.3 | 64.3 | 57.1 | 53.6 | 46.4 |
| Healthcare/Social Assistance Services | 54.0 | 7.1 | 60.7 | 55.4 | 51.8 | 48.2 |
| Professional/Scientific/Technical Services | 50.2 | -0.6 | 50.8 | 49.2 | 52.3 | 48.4 |
| Retail Trade | 42.0 | 4.5 | 39.3 | 42.9 | 46.4 | 39.3 |
The Industry Index only includes panelists’ forecasts for their industry sales, profits, hiring, and capital expenditure, and does not include the Alabama or US outlooks.
- Industry Sales: In the Q2 2024 survey, expectations for industry sales were largely strongly expansionary. All but two industry categories had sales indexes above 60, indicating strong confidence in their forecasts for sales growth. The sales indexes for “all other services” and transportation, information, and utilities were especially confident at 67.7 and 65.6, respectively. Business leaders in professional, scientific, and technical services have a very mildly confident forecast for sales (50.8), and panelists in retail trade are expecting decreased sales compared to Q1 2024 with a moderately contractionary index of 39.3.
- Industry Profits: Forecasts for profits were also expansionary for seven of the nine industry groups this quarter. Like sales, “all other services” had the highest profits index at a strongly confident 61.5. Five industry groups were moderately expansionary with indexes ranging from 55.0 to 59.4, and construction was mildly positive with an index of 53.8.
- Industry Hiring: Forecasts for industry hiring were milder for most industry groups in Q2 2024, with five of the nine indexes registering as mildly expansionary. Construction had the highest confidence in their forecast for increased hiring this quarter with a strongly expansionary index of 61.5. Two industries are expecting to decrease hiring compared to their Q1 levels with mild confidence: retail trade (46.4) and transportation, information, and utilities (46.9).
- Industry Capital Expenditures: The capital expenditures indexes were the most varied industry component index. The construction outlook was strongly expansionary, followed by two industry groups with moderately confident forecasts for growth, and one mildly positive outlook (50.8). Transportation, information, and utilities had a neutral capital expenditures outlook, and the remaining four groups had contractionary forecasts for capital spending this quarter, with indexes ranging from mildly confident (48.4) to strongly confident (39.3).
Firm Size: Second Quarter 2024 Outlook |
| Number of Employees | |||
|---|---|---|---|
| 0 to 19 | 20 to 99 | 100+ | |
| ABCI | 55.4 | 51.7 | 54.2 |
| Alabama Economy | 54.3 | 51.0 | 56.4 |
| US Economy | 46.6 | 43.3 | 50.5 |
| Industry Sales | 63.1 | 55.8 | 62.8 |
| Industry Profits | 58.5 | 52.4 | 54.8 |
| Industry Hiring | 55.1 | 54.3 | 51.6 |
| Industry Capital Expenditures | 54.8 | 53.4 | 48.9 |
Small and Large Firms are Slightly More Confident than Mid-Sized Firms in Q2 2024
- In the Q2 2024 ABCI survey, panelists across firm sizes are expecting economic growth compared to last quarter. Small firms, those with fewer than 20 employees, had the highest Q2 2024 ABCI at a moderately expansionary index of 55.4. This is 6.2 points above the Q1 2024 small firm ABCI. Panelists at these firms are feeling strongly confident in their forecasts for increased sales and moderately confident anticipating profit growth compared to last quarter. However, this category still has a contractionary forecast for the US economy.
- Panelists in large firms, those with 100 or more employees, had a mildly expansionary ABCI of 54.2 this quarter after increasing 4.5 points from last quarter. Business leaders at large firms have a more positive outlook for the statewide economy than their peers but lower expectations for hiring and capital expenditures.
- Mid-sized firms, those with between 20 to 99 employees, had a mildly expansionary ABCI of 51.7 this quarter, which is 2.8 points above their Q1 2024 index. Panelists in mid-sized firms are still anticipating growth in their industry component indexes, but they are less confident in those forecasts than their peers.
The Center for Business and Economic Research would like to thank the 187 Alabama business executives who completed the second quarter 2024 ABCI survey. This is the 90th consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the June 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the third quarter of 2024.
Analysis provided by Susannah Robichaux, Socioeconomic Analyst, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.