Birmingham-Hoover Metro Area Report

Alabama Business Confidence Index™

Third Quarter 2024

Continued Forecasts for Growth

Birmingham-Hoover’s ABCI remained mildly expansionary in the Q3 2024 survey, decreasing by only 0.2 points to register at 53.3. This communicates an overall mildly expansionary forecast for this quarter compared to Q2 2024. Despite decreases in half of the component indexes from last quarter’s levels, five of the six indexes remained expansionary in the most recent survey. Metro business leaders continue to be most optimistic about growth in industry sales this quarter, with a moderately confident outlook of 57.1. Only the US outlook had a contractionary forecast.

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 Q3 2024 economic index for Alabama remained mildly expansionary for the second consecutive quarter despite a 1.0-point decrease from last quarter.
• US Economy: For the twelfth consecutive quarter, Birmingham-Hoover’s US outlook was contractionary, decreasing 0.9 points to signal moderate confidence in this negative outlook.
• Industry Sales: Despite decreasing 5.4 points from Q2 2024, Birmingham-Hoover panelists are still forecasting industry sales growth with moderately confident index of 57.1 in Q3 2024. This has been the metro’s highest index for two quarters.
• Industry Profits: Just over 45 percent of metro panelists are expecting their industry profits to grow in Q3 2024 compared to the previous quarter. As a result, the index grew 0.2 points to remain moderately expansionary at 56.4.
• Industry Hiring: The hiring index for Birmingham-Hoover is also moderately expansionary this quarter at 55.7 after increasing 1.0 points. This is the highest the index has been since Q3 2022 and the third consecutive expansionary forecast, indicating sustained expectations for increased hiring in the metro.
• Industry Capital Expenditures: Capital expenditures had the highest point growth this quarter, increasing by 5.0 points to reach a moderately expansionary 55.0.

ABCI Birmingham-Hoover in Context

After reaching a historic high of 67.2 in Q3 2021, Birmingham-Hoover’s ABCI steadily decreased, registering as contractionary from Q3 2022 until Q1 2024. During those seven quarters, metro panelists’ forecasts for the US economy were mostly strongly contractionary, while the outlook for the Alabama economy or industry component indexes were mostly more mildly contractionary but occasionally neutral or mildly expansionary for a quarter. For the last two quarters, all of Birmingham-Hoover’s component indexes have been neutral or expansionary except the US outlook, which remains contractionary.

Business confidence remained mildly expansionary across Alabama this quarter. Birmingham-Hoover and Huntsville had the highest metro ABCIs this quarter at a mildly confident 53.3. Panelists in Birmingham-Hoover had the highest confidence forecasting profit growth of any metro this quarter, while Huntsville business leaders are expecting hiring growth with more confidence than their peers. Tuscaloosa had a very mildly confident Q3 2024 ABCI of 51.1, and Montgomery had a neutral index of 50 this quarter, indicating expectations for a continuation of last quarter’s overall conditions.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the third quarter 2024 ABCI™ survey. This is the 91st consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the September 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the fourth quarter of 2024.

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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.