Birmingham-Hoover Metro Area Report

Alabama Business Confidence Index™

Second Quarter 2021

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Strong Positive Forecast from Metro Businesses

Business confidence in Birmingham-Hoover is very confident at 65.5 in the second quarter 2021 ABCI survey. This index is 8.0 points higher than the metro’s Q1 2021 ABCI and indicates strong expectations for economic growth this quarter. With five out of the six indexes registering above 62, panelists in Birmingham-Hoover are feeling optimistic about their own industry prospects as well as the statewide and national economies as a whole.

Second Quarter 2021 Outlook

Birmingham-Hoover Statewide
ABCI 65.5 64.3
Alabama Economy 71.9 70.7
US Economy 67.2 63.6
Industry Sales 68.8 68.4
Industry Profits 58.6 61.3
Industry Hiring 64.1 62.3
Industry Capital Expenditures 62.5 59.7

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: Birmingham-Hoover’s index for the Alabama economy increased 8.2 points to reach an exceptionally confident 71.9 in the Q2 2021 survey. This was the highest component index for the quarter.
  • US Economy: Birmingham-Hoover business leaders also expect economic conditions throughout the U.S. to improve with strong confidence in Q2 2021, as shown by the index reading of 67.2, after a 12.2-point increase.
  • Industry Sales: At 64.5, the sales index communicates strong confidence from Birmingham-Hoover panelists that sales will be higher in Q2 than in Q1 2021. This index is a 9.8-point increase from the Q1 2021 sales index.
  • Industry Profits: The profits index registered at 58.6 after increasing 3.6 points from the previous quarter, indicating another quarter of moderate confidence in profit growth.
  • Industry Hiring: After a 4.1-point increase from Q1 2021, metro panelists are anticipating increased hiring with a strongly confident index of 64.1 in Q2 2021.
  • Industry Capital Expenditures: Birmingham-Hoover panelists are forecasting elevated levels of capital expenditures in the coming quarter with a very positive index of 62.5. This is 3.5 points above the moderately positive Q1 2021 index.

 

Birmingham-Hoover Response Breakdown

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Historical Birmingham-Hoover ABCI™ and Industry Component Indexes

ABCI Birmingham-Hoover in Context

In the second quarter 2021 survey, Birmingham-Hoover’s ABCI is the highest it has been since Q2 2017. Metro business confidence dropped in the Q3 2020 survey after COVID-19 was declared a national emergency. It has been slowly recovering since then with mild and then moderate confidence in the quarters following the initial drop. Q2 2021’s responses communicate strong forecasts for economic growth compared to the previous quarter and the beginning of the economic recovery from a difficult year.

Confidence soared across the state in the Q2 2021 survey with all metro ABCIs registering above 63. Business confidence was highest in Tuscaloosa with an ABCI of 65.6, followed closely by Birmingham-Hoover at 65.5. Mobile’s ABCI reached 64.6 this quarter while Huntsville and Montgomery both had ABCIs of 63.8 for the quarter. All of the metros communicated incredibly favorable forecasts for all of the component indexes but especially the Alabama economic outlook and the industry sales index.

ABCI™ by Metro Area

Birmingham-Hoover ABCI™ Compared to Statewide ABCI™

 

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the second quarter 2021 ABCI™ survey. This is the 78th 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 2021.

 

  &  Logo of the Birmingham Business Alliance

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.

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