Alabama Business Confidence Index
Alabama Business Confidence Index™
Second Quarter 2026
Download the Full ReportModerately Confident Forecasts Continue in Q2 2026
The Alabama Business Confidence Index (ABCI) grew 1.6 points to reach 55.0 in the Q2 2026 survey, as panelists continue forecasting overall growth with moderate confidence for the third consecutive quarter. Business leaders throughout the state are anticipating industry growth and improved economic conditions with mild to strong confidence. Panelists are most confident forecasting increased sales this quarter but are only mildly confident in their expansionary forecast for the US economy.
Second Quarter 2026 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: Alabama business leaders are continuing to expect improved conditions in the statewide economy with a moderately confident index of 57.6, which is only 0.1 points above last quarter’s index.
- US Economy: Despite a 1.8-point decrease from last quarter’s US outlook, panelists are still forecasting improved economic conditions with mild confidence. Just over 34 percent are expecting worse conditions in the national economy compared to Q1 2026, but 42 percent of panelists are anticipating a better US economy this quarter.
- Industry Sales: Industry sales was the highest component index this quarter at a strongly confident 61.0, after increasing 3.9 points from last quarter. The index has been expansionary with varying levels of confidence since Q2 2023.
- Industry Profits: Business leaders are forecasting increased profits with moderate confidence in Q2 2026. The index grew 4.8 points from its mildly confident Q1 2026 level to reach 57.4.
- Industry Hiring: For the third consecutive quarter, Alabama business leaders are forecasting hiring growth with mild confidence. The index grew 0.7 points to register at 54.6 this quarter. Over half of the ABCI panelists are expecting to continue hiring in Q2 2026 at the same pace as last quarter, while 31 percent expect to increase hiring this quarter.
- Industry Capital Expenditures: The statewide capital expenditures index remained moderately confident in the Q2 2026 survey, increasing 1.9 points to reach 57.4. Panelists have consistently forecasted increased capital spending since Q1 2025.
Statewide Response Breakdown
Statewide Response BreakdownParticipants’ responses reported as percentages |
| Much Worse | Somewhat Worse | No Change | Somewhat Better | Much Better | |
|---|---|---|---|---|---|
| Alabama Economy | 0.8 | 17.6 | 36.0 | 41.6 | 4.0 |
| US Economy | 5.6 | 28.8 | 24.0 | 36.0 | 5.6 |
| Industry Sales | 0.0 | 18.4 | 26.4 | 48.0 | 7.2 |
| Industry Profits | 0.0 | 20.0 | 35.2 | 40.0 | 4.8 |
| Industry Hiring | 0.8 | 12.8 | 55.2 | 29.6 | 1.6 |
| Industry Capital Expenditures | 2.4 | 13.6 | 40.8 | 38.4 | 4.8 |
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 1.7-percent increase in Alabama GDP for 2026, a slight decrease from 2025’s growth rate of 2.0 percent. Alabama employment is expected to only grow by 0.2 percent in 2026, which is just below 2025’s 0.3 percent. CBER anticipates that the state’s total tax receipts will grow by 2.0 percent this year, a lower rate than the 2.8-percent increase measured in 2025.
Metros’ Mild to Moderate Confidence
The ABCIs for the three participating metros ranged from mild to moderately confident in the Q2 2026 survey, though all were below the overall state ABCI. Birmingham had the highest metro ABCI this quarter at a moderately confident index of 56.4, with metro panelists forecasting increased industry sales and improved conditions in the Alabama economy with higher confidence than their peers. The Q2 2026 ABCIs for Huntsville and Tuscaloosa were 54.1 and 53.8, respectively, reflecting a mildly confident outlook that included contractionary forecasts for the US economy along with expectations for growth in sales and capital expenditures. Unfortunately, there was not enough participation from Mobile or Montgomery to calculate valid metro ABCIs for this quarter.
ABCI by Metro Area
Metropolitan Statistical Area (MSA): Second Quarter 2026 Outlook |
| Statewide | Birmingham–Hoover | Huntsville | Mobile* | Montgomery* | Tuscaloosa | |
|---|---|---|---|---|---|---|
| ABCI | 56.6 | 56.4 | 54.1 | — | — | 53.8 |
| Alabama Economy | 57.6 | 60.5 | 53.5 | — | — | 51.4 |
| US Economy | 51.8 | 51.3 | 44.4 | — | — | 49.3 |
| Industry Sales | 61.0 | 60.5 | 59.0 | — | — | 57.6 |
| Industry Profits | 57.4 | 56.6 | 54.2 | — | — | 56.2 |
| Industry Hiring | 54.6 | 52.6 | 54.9 | — | — | 51.4 |
| Industry Capital Expenditures | 57.4 | 56.6 | 58.3 | — | — | 56.9 |
*Unfortunately, there was not enough participation from Mobile or Montgomery to calculate valid metro ABCIs for this quarter.
Growth Forecasted by All Industries
In the Q2 2026 ABCI survey, all eight responding industries are anticipating growth with confidence ranging from mild to very strong. 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. The industry indexes for wholesale trade (71.9) and manufacturing (65.8) both communicate very strong confidence in their expansionary forecasts. Four industries are moderately confident in their expectations for growth with industry indexes ranging from 55.2 (“all other services”) to 59.0 (healthcare and social assistance), and the remaining two industries have mildly confident expansionary forecasts. Six of the eight industry indexes increased from Q1 2026, indicating higher confidence in their forecasts. Only two decreased from last quarter, though by less than two points. Wholesale trade had the most notable change from Q1 2026, with their index increasing 29.4 points from last quarter’s moderately contractionary forecast.
Industry Component Index: Second Quarter 2026 Outlook |
| Industry Index | Change from Q1 | Sales | Profits | Hiring | Capital Expenditures | |
|---|---|---|---|---|---|---|
| Wholesale Trade | 71.9 | 29.4 | 81.2 | 78.1 | 59.4 | 68.8 |
| Manufacturing | 65.8 | 8.2 | 73.5 | 67.6 | 58.8 | 63.2 |
| Healthcare/Social Assistance Services | 59.0 | 1.2 | 63.9 | 58.3 | 58.3 | 55.6 |
| Finance/Insurance/Real Estate | 57.9 | 3.3 | 64.4 | 58.7 | 53.8 | 54.8 |
| Statewide | 57.6 | 2.8 | 61.0 | 57.4 | 54.6 | 57.4 |
| Construction | 57.3 | 1.0 | 62.5 | 54.2 | 62.5 | 50.0 |
| All Other Services | 55.2 | -1.5 | 55.2 | 52.6 | 56.0 | 56.9 |
| Retail Trade | 52.1 | 6.9 | 50.0 | 50.0 | 50.0 | 58.3 |
| Professional/Scientific/Technical Services | 51.2 | -1.9 | 53.6 | 51.2 | 46.4 | 53.6 |
| Transportation/Information/Utilities* | — | — | — | — | — | — |
* Unfortunately, there was not enough participation to calculate a valid industry index for transportation, information, and utilities for Q2 2026.
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: Business leaders across most industries are expecting to increase sales this quarter. Panelists in wholesale trade (81.2) and manufacturing (73.5) had the highest sales indexes, but three other industries also had sales indexes greater than 60, communicating strong confidence in their expansionary forecasts. Only panelists in retail trade are forecasting a continuation of last quarter’s level of sales with a neutral sales index of 50.0.
- Industry Profits: The forecasts for industry profits followed a similar pattern as sales, but confidence in the expansionary forecasts was more subdued. Professionals in wholesale trade and manufacturing are outliers with strong confidence that their profits will increase compared to their Q1 2026 levels, while business leaders in retail trade had the lowest profits index with a neutral 50. Two industries are moderately confident in their expansionary profits forecast with indexes in the upper 50s, and three industries are anticipating increased sales with mildly confident indexes in the lower 50s.
- Industry Hiring: Six of the eight industry groups are forecasting hiring growth in Q2 2026 compared to their Q1 2026 levels, with confidence levels ranging from mild (finance, insurance, and real estate) to strong (construction). For the second consecutive quarter, panelists in construction are the most confident that their hiring will increase with a Q2 2026 hiring index of 62.5. The only industry with a contractionary hiring index was professional, scientific, and technical services, who are forecasting decreased hiring compared to last quarter with a mildly confident index of 46.4.
- Industry Capital Expenditures: The industry capital expenditures indexes were largely expansionary this quarter. Only construction had a neutral index, indicating expectations for a continuation of last quarter’s capital spending in Q2 2026. Wholesale trade and manufacturing are most confident their capital spending will increase this quarter with indexes above 60. This is manufacturing’s second consecutive quarter with a high capital spending index, but wholesale trade’s strongly confident expansionary outlook this quarter is 28.8 points above their Q1 2026 contractionary index of 40.0. Panelists in construction are forecasting a continuation of last quarter’s capital spending levels with a neutral index of 50.0 for the second consecutive quarter.
Firm Size: Second Quarter 2026 Outlook |
| Number of Employees | |||
|---|---|---|---|
| 0 to 19 | 20 to 99 | 100+ | |
| ABCI | 54.2 | 58.7 | 58.2 |
| Alabama Economy | 53.8 | 58.3 | 62.5 |
| US Economy | 47.6 | 54.2 | 55.6 |
| Industry Sales | 56.6 | 66.0 | 62.5 |
| Industry Profits | 54.2 | 60.4 | 59.0 |
| Industry Hiring | 54.2 | 55.6 | 54.2 |
| Industry Capital Expenditures | 58.5 | 57.6 | 55.6 |
Moderately Confident Forecasts from Mid-Sized and Large Firms
- In the Q2 2026 survey, ABCIs by firm size ranged from mildly to moderately expansionary. Mid-sized firms, those with between 20 to 99 employees, had the highest ABCI by firm size for the quarter, registering at a moderately confident 58.7, a 5.5-point increase from their Q1 2026 forecast. Panelists in these firms are forecasting increased sales (66.0) and profits (60.4) with strong confidence and also expect to increase hiring with slightly more confidence than their peers.
- Business leaders in large firms, those with 100 or more employees, are also forecasting overall growth with moderate confidence this quarter. Their Q2 2026 ABCI was 58.2, which is a 2.1-point decrease from their strongly confident Q1 2026 ABCI. These panelists are anticipating improvements in the Alabama economy and growth in sales with strong confidence for the second consecutive quarter, but their indexes for hiring and capital spending both fell from strong to more conservative levels of confidence this quarter.
- The ABCI for small firms, those with fewer than 20 employees, grew 1.1 points this quarter to remain mildly expansionary at 54.2. Unlike their counterparts, these panelists are continuing to forecast worse conditions in the US economy, and they are slightly more confident anticipating increased capital spending in Q2 2026 compared to last quarter.
The Center for Business and Economic Research would like to thank the 125 Alabama business executives who completed the second quarter 2026 ABCI survey. This is the 98th 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 2026.
Analysis provided by Susannah Robichaux, Socioeconomic Analyst, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.