Birmingham Metro Area Report

Alabama Business Confidence Index™

Fourth Quarter 2025

Overall Increase in Birmingham Business Confidence

After an overall neutral forecast in Q3 2025, Birmingham’s ABCI increased by 3.8 points to reach a mildly confident expansionary forecast of 53.6 in the Q4 2025 survey. Last quarter, three of the metro’s six component indexes were contractionary: the US economic outlook, industry hiring, and profits. This quarter, panelists are feeling more optimistic, with increases across almost all of the component indexes. Only the US outlook remained contractionary, as over 43 percent of panelists forecast worse economic conditions in the national economy in Q4 2025.

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: This quarter, metro business leaders are anticipating growth in the Alabama economy with a mildly confident index of 54.3. This is 4.3 points above last quarter’s neutral forecast.
• US Economy: In contrast, expectations for the US economy remained contractionary (43.5), with the index decreasing 1.9 points. This was Birmingham’s lowest component index and the only contractionary forecast in the Q4 2025 survey.
• Industry Sales: The Q4 2025 sales index increased 2.4 points to register at 59.8, indicating a strongly confident expansionary outlook. This makes three quarters of the sales outlook being Birmingham’s highest component index.
• Industry Profits: Profits are expected to increase compared to Q3 2025 with a moderately confident index of 55.4 after growing by 6.3 points in the Q4 2025 survey.
• Industry Hiring: Just over 56 percent of Birmingham panelists are forecasting no change in their hiring levels compared to last quarter, while the remaining responses are split evenly between expansionary and contractionary outlooks. As a result, the metro’s overall hiring index registered at a neutral 50.0.
• Industry Capital Expenditures: Expectations for capital expenditures are moderately expansionary this quarter: the index increased 6.8 points to register at 58.7.

ABCI Birmingham in Context

Over the last ten quarters, the Birmingham ABCI has oscillated between expansionary and contractionary forecasts. Business confidence was low throughout 2023 due to contractionary forecasts for industry components and strongly negative expectations for the US economy. Beginning in Q2 2024 though, confidence in industry growth and improved conditions in the Alabama economy began to counterbalance the contractionary US outlook. Since Q2 2024, Birmingham’s sales index has been consistently expansionary, though the other component indexes have had more fluctuations.

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. More details can be found in the Statewide ABCI report.

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.

  & 

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.

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