Birmingham-Hoover Metro Area Report

Alabama Business Confidence Index™

Second Quarter 2025

Uncertainty Decreases Business Confidence in Q2 2025

After jumping to a strongly confident expansionary forecast in Q1 2025, Birmingham–Hoover’s ABCI decreased 8.7 points in the Q2 2025 survey to register at a mildly confident 51.9. This decrease in confidence from Q1 to Q2 was most pronounced in business leaders’ expectations for the US economy, but all six component indexes dropped in Q2 2025 compared to the previous quarter. Metro panelists are most optimistic forecasting increased industry sales moving into Q2.

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

Birmingham-Hoover Component Index Analysis

• Alabama Economy: The Q2 2025 Alabama economic index registered at 50.8 after decreasing 9.2 points from last quarter, indicating mild expectations for improved statewide economic conditions compared to Q1 2025.
• US Economy: Birmingham–Hoover business leaders are anticipating worse conditions in the U.S. economy with a mild confident index of 48.4. The index dropped by 16.6 points from its strongly expansionary Q1 2025 outlook.
• Industry Sales: Industry sales are forecasted to continue growing in Q2 2025 with a moderately confident index of 58.1. Despite this being a 4.4-point decrease from the metro’s Q1 2025’s sales index, it is the area’s highest industry component index.
• Industry Profits: The Q2 2025 profits index decreased 7.5 points from Q1 2025 to reach a neutral 50, indicating overall expectations for a continuation of last quarter’s profit levels.
• Industry Hiring: Birmingham–Hoover’s hiring index was also 50.0 this quarter, 5.8 points below last quarter’s moderately expansionary outlook. Just over 25 percent of panelists expect to increase hiring this quarter, while the same percentage expect to decrease hiring compared to last quarter.
• Industry Capital Expenditures: The metro’s capital expenditures index registered as mildly expansionary this quarter after decreasing 8.5 points to register at 54.0 for Q2 2025.

ABCI Birmingham-Hoover in Context

Birmingham–Hoover’s business confidence was mildly expansionary this quarter at 51.9. Over the last two years, the ABCI has primarily oscillated between mildly confident contractionary and mildly confident expansionary forecasts. However, the metro’s ABCI increased sharply to 60.6 in Q1 2025, which was the highest overall business confidence index since Q3 2021, as panelists forecasted improved economic conditions and increased industry sales and capital expenditure with strong confidence. In the Q2 2025 ABCI survey, overall expectations remained positive but the levels of confidence in those predictions has returned to much lower levels.

Panelists in Mobile had the highest metro ABCI this quarter at 54.4, with more confidence in their forecasts for increased sales, profits, and hiring than the other metro areas. The Birmingham–Hoover ABCI was also expansionary with a mildly confident index of 51.9. The ABCIs for Huntsville, Tuscaloosa, and Montgomery were all below 50, as business leaders forecast worse economic conditions in both the statewide and national economies and the contraction of at least one of their industry indexes.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the second quarter 2025 ABCI™ survey. This is the 94th 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 2025.

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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 Birmingham Business Alliance.

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