Birmingham-Hoover Metro Area Report
Alabama Business Confidence Index™
Fourth Quarter 2021Download the Full Report
Business Confidence Drops Heading into Q4 2021
Businesses confidence in the Birmingham-Hoover metro area saw a sharp downturn in the Q4 2021 ABCI survey amidst a rise in the COVID Delta variant. Despite the 13-point decrease from the Q3 2021 index, Birmingham-Hoover’s ABCI remained mildly positive, registering at 54.2. This is the first time in four quarters that the metro’s ABCI has decreased; after dropping to 44.7 in Q3 2020, the area’s ABCI had been steadily increasing until it reached record high confidence of 67.2 last quarter.
Fourth Quarter 2021 Outlook
|Industry Capital Expenditures||57.6||59.2|
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: Metro panelists are moderately optimistic about growth in the Alabama economy this quarter with a fairly positive index of 57.6 after decreasing 10.6 points from Q3 2021.
- US Economy: Birmingham-Hoover business leaders are anticipating a contraction in the U.S. economy this quarter with a mildly negative index of 46.7. This is 21.5 points below the Q3 2021 index, with 43.4 percent of panelists forecasting a worse U.S. economy compared to the previous quarter.
- Industry Sales: With an index of 54.3, sales are forecast to continue growing in the upcoming quarter with mild confidence. This is a 11.6-point decrease from Q3 2021.
- Industry Profits: This quarter, the Birmingham-Hoover profits index decreased 12.5 points to register at a neutral 51.1, indicating expectations for a continuation of last quarter’s profit levels.
- Industry Hiring: Area business leaders expressed moderate confidence in increased hiring this quarter. The index is 9.4 points below last quarter’s and is tied as one of the highest component indexes for Q4 2021.
- Industry Capital Expenditures: After decreasing 12.9 points from Q3 2021, the metro capital expenditures index also registered this quarter at moderately confident 57.6.
Birmingham-Hoover Response Breakdown
Historical Birmingham-Hoover ABCI™ and Industry Component Indexes
ABCI Birmingham-Hoover in Context
Birmingham-Hoover’s ABCI registered at a mildly positive 54.2 this quarter after decreasing 13 points from Q3 2021’s strongly confident index of 67.2. In the quarter after the national emergency for the COVID-19 pandemic was declared, Birmingham-Hoover’s forecast became mildly negative. However, the metro’s indexes have consistently grown more positive over the last four quarter until Q4 2021. This quarter’s drop in business confidence may reflect the higher level of uncertainty as Alabama grapples with the highly contagious Delta variant.
Though business confidence decreased from the third quarter levels across the state’s metro areas, ABCI panelists are still forecasting growth in Q4 2021. The metro’s hiring indexes were all above 57, indicating sustained expectations for increased hiring despite the higher levels of uncertainty that are reflected in the other indexes. Tuscaloosa had the highest index with a strongly confident ABCI of 60.9, followed by Huntsville at a more moderate 58.8, Mobile at 56.6, and Montgomery at 55.9. Birmingham-Hoover had the lowest metro ABCI this quarter at a mildly positive 54.2.
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 fourth quarter 2021 ABCI™ survey. This is the 80th 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 2022.
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.