Alabama Business Confidence Index

Alabama Business Confidence Index™

First Quarter 2026

Moderate Optimism Continues

The Alabama Business Confidence Index (ABCI) remained at a moderately confident expansionary index of 55.0 in the Q1 2026 survey, only decreasing 0.1 points from Q4 2025’s ABCI. All six component indexes continued to be expansionary this quarter, despite industry sales and profits decreasing from their Q4 2025 levels. Confidence levels ranged from a mildly confident 52.6 for industry profits to a moderately confident 57.5 for the Alabama economy as panelists anticipate overall growth in Q1 2026.

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 Alabama economic index registered at 57.5, a 1.8-point increase from last quarter, as panelists continue to forecast improved economic conditions throughout the state with moderate confidence. This was the highest component index for the quarter.
• US Economy: For the second consecutive quarter, Alabama business leaders are forecasting growth in the U.S. economy with mild confidence. Just under 41 percent of panelists are anticipating improved economic conditions in the national economy compared to last quarter, though 27 percent are expecting worse conditions this quarter.
• Industry Sales: Despite a 2.9-point decrease from last quarter’s sales index, panelists are still anticipating increased sales this quarter with a moderately confident index of 57.1.
• Industry Profits: The statewide profits index registered at a mildly confident expansionary 52.6 in the Q1 2026 survey after decreasing 2.9 points from Q4 2025.
• Industry Hiring: Business leaders are continuing to forecast increased hiring with mild confidence in Q1 2026. Just under 58 percent of panelists expect to continue hiring at the same rate as last quarter, while 29 percent forecast an increase in their hiring and 14 percent anticipate a decrease from their Q4 2025 hiring levels.
• Industry Capital Expenditures: Alabama business leaders are expecting to increase their capital spending this quarter with a moderately confident index of 55.5, after increasing 0.2 points from last quarter. The capital spending index has been expansionary with varying levels of confidence since Q4 2024.

• Industry Sales: Six of the nine industry groups had moderately to strongly confident expansionary sales forecasts in the Q1 2026 survey. Panelists in construction are the most confident that their sales will increase this quarter with an index of 62.5, which is 12.5 points above their Q4 2025 neutral sales outlook. The only Q1 2026 neutral sales outlook was for transportation, information, and utilities, who had a strongly expansionary forecast in Q4 2025, but are now anticipating a continuation of last quarter’s levels of sales. Panelists in retail and wholesale trade both had expansionary outlooks last quarter but now expect sales to decrease.
• Industry Profits: Expectations for profits were more subdued than the other industry components– only four of the nine groups had an expansionary index above 52.0, and the highest of those was finance, insurance, and real estate’s moderately confident 57.3. Two industries had neutral outlooks for profits with indexes very near 50, and three industries had contractionary forecasts for their Q1 2026 profits with moderate to strong levels of confidence in their forecasts.
• Industry Hiring: Business leaders in most industries are expecting to increase hiring this quarter with varying levels of confidence. Panelists in construction had the highest hiring index at a strongly confident 62.5. The other expansionary hiring indexes had more moderate and mild levels of confidence. Only wholesale trade had a contractionary forecast for hiring in Q1 2026, with their index falling 10.0 points from their neutral Q4 2025 outlook to a strongly contractionary 40.0.
• Industry Capital Expenditures: The forecasts for capital expenditures had a large range with a few distinct groupings. Three industries have strongly confident expectations for increased capital expenditures with indexes above 60. It is a steep drop to the next highest indexes, which were mildly confident expansionary outlooks at 51.6 and 52.5. Two industries had neutral forecasts (50.0), and two had contractionary forecasts.

Large Firms Forecasting Growth with Strongest Confidence

• In the Q1 2026 survey, business leaders across firm sizes are forecasting growth but with different levels of confidence. Large firms, those with 100 or more employees, had a strongly confident expansionary ABCI of 60.3 (up 5.3 points from Q4 2025). Mid-size firms, those with between 20 to 99 employees, had milder confidence in their expansionary forecast at 53.2 (a decrease of 1.3 points), followed closely by small firms, those with fewer than 20 employees, who had a Q1 2026 ABCI of 53.1 (a 2.5-point decrease).
• Panelists in large firms were more optimistic than their peers in all six of the component indexes, with especially strong confidence in their forecasts for increased industry sales and capital expenditure growth. Business leaders in small and mid-sized firms are also anticipating growth in sales and capital spending, though their levels of confidence in those forecasts are mild and moderate.
• The differences in the groups’ forecasts are more notable for industry hiring and profits. Small firms have an essentially neutral hiring index of 49.6, indicating expectations for a continuation of last quarter’s hiring levels. Mid-sized firms have a mildly contractionary forecast for their profits (48.9), unlike their counterparts in mid-sized and large firms.

The Center for Business and Economic Research would like to thank the 154 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.

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