Birmingham-Hoover Metro Area Report

Alabama Business Confidence Index™

First Quarter 2025

Download the Full Report

Optimistic Forecast in Q1 2025

Birmingham-Hoover’s ABCI increased 13.4 points to reach 60.6 in the Q1 2025 survey, signaling strong confidence in forecasting economic expansion compared to the previous quarter. This is the highest the metro’s ABCI has been since Q3 2021. With Q1 2025 indexes ranging from moderately to strongly confident, metro business leaders are anticipating growth in all six ABCI of the component index categories. Expectations for improved conditions in the US economy and increased industry sales and capital spending were the highest this quarter, while confidence was more modest when forecasting higher levels of industry hiring.

First Quarter 2025 Outlook

Birmingham-Hoover Statewide
ABCI 60.6 61.0
Alabama Economy 60.0 63.6
US Economy 65.0 63.7
Industry Sales 62.5 62.7
Industry Profits 57.5 57.6
Industry Hiring 55.8 58.4
Industry Capital Expenditures 62.5 59.8

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 business leaders are anticipating improved economic conditions in Alabama compared to Q4 2024, resulting in a 13.3-point increase to reach a strongly confident 60.0.
  • US Economy: The US economic outlook increased 22.5 points from Q4 2024’s moderately contractionary outlook to reach a strongly optimistic index of 65.0. This is the metro’s first expansionary US outlook since Q3 2021.
  • Industry Sales: The Q1 2025 sales index was 62.5 after increasing 6.7 points from Q4 2024. Just over 63 percent of Birmingham-Hoover panelists are expecting their sales to increase in Q1 2025 compared to the previous quarter.
  • Industry Profits: With an index of 57.5, metro panelists are forecasting an increase in industry profits compared to last quarter’s levels with moderate confidence. This quarter’s index is 4.2 points above Q4 2024’s mildly expansionary forecast.
  • Industry Hiring: Birmingham-Hoover’s hiring index rebounded 15.0 points from last quarter’s contractionary forecast to reach a moderately confident expansionary index of 55.8.
  • Industry Capital Expenditures: Birmingham-Hoover panelists are forecasting capital expenditure growth compared to last quarter’s levels with strong confidence. The index increased 18.3 points from Q4 2024 to reach 62.5 in the Q1 2025 survey.

 

Birmingham-Hoover Response Breakdown

Print  CSV  Copy  

Historical Birmingham-Hoover ABCI™ and Industry Component Indexes

Historical Birmingham-Hoover ABCI™ and Economic Outlook Component Indexes

ABCI Birmingham-Hoover in Context

The metro’s outlook was contractionary for almost two years (Q3 2022 to Q1 2024) before area business leaders’ expectations for growth in the industry components, especially sales and profits, rose high enough in Q2 and Q3 2024 to compensate for their strongly contractionary forecasts for the US economy. Moving into Q4 2024, anticipated decreases in hiring and capital spending as well as worse conditions in the statewide and national economies led to a mildly contractionary ABCI of 47.2, but with the significant increase in the US economic index and expectations for growth in all component categories, the metro’s Q1 2025 ABCI has rebounded.

Panelists in Montgomery had the highest metro ABCI this quarter at 63.3, with strongly confident expansionary forecasts for all of the component indexes. With an ABCI of 61.4, Huntsville had the highest industry sales and hiring indexes of the four participating metros. Birmingham-Hoover followed closely with a Q1 2025 ABCI of 60.6 and notably high expectations for growth in capital spending compared to last quarter. Business leaders in Tuscaloosa expressed moderate confidence in their expansionary forecast with moderate to strong values for all their component indexes. There was not enough participation to include Mobile’s outlook this quarter.

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 first quarter 2025 ABCI™ survey. This is the 93rd consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the March 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the second quarter of 2025.

 

  &  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.