Birmingham-Hoover Metro Area Report

Alabama Business Confidence Index™

Second Quarter 2024

Expansionary Forecast from Birmingham–Hoover Panelists

Birmingham–Hoover business leaders are anticipating growth in Q2 2024 with a mildly optimistic ABCI of 53.5. This is 6.1 points above last quarter’s index, indicating expectations for growth this quarter compared to Q1 2024. All of the metro’s component indexes increased from last quarter’s levels, though the component forecasts remain varied, ranging from very strongly expansionary (industry sales) to neutral (industry capital expenditures) to moderately contractionary (U.S. outlook) for the quarter.

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 forecasting improved conditions for the statewide economy this quarter, with the index increasing 3.9 points to reach 53.1.
• US Economy: The US economic outlook remained moderately contractionary this quarter at 44.5 after a 3.7-point increase from last quarter. Though the index remains negative, it has been steadily increasing from its low of 25.0 in Q4 2022.
• Industry Sales: At 62.5, the metro’s sales index was the highest component index for the second consecutive quarter, growing by 11.7 points to indicate very strong confidence in the forecast for growth.
• Industry Profits: The industry profits index also grew significantly from last quarter, increasing 11.2 points to reach 56.2 in the Q2 2024 ABCI.
• Industry Hiring: The hiring index increased 4.7 points from last quarter’s neutral index to reach 54.7, indicating mild confidence in their forecast for increased hiring compared to last quarter.
• Industry Capital Expenditures: The Q2 2024 capital expenditures index increased 1.7 points to become neutral after two quarters of mildly contractionary forecasts.

ABCI Birmingham-Hoover in Context

In the Q2 2024 survey, Birmingham–Hoover’s ABCI was expansionary for the first time since Q2 2022, registering a mildly confident 53.5. From 2013 to 2020, metro business leaders were mostly confident forecasting economic growth with an average ABCI of 56. The onset of the COVID-19 pandemic led to a brief drop in Birmingham–Hoover’s ABCI in Q3 2020, but the index rebounded to expansionary levels until strongly negative forecasts for the US and AL economies pulled it below 50 in Q3 2022. Metro panelists’ overall forecasts remained mostly contractionary until this quarter, when expectations for industry sales and profits rose significantly.

Business confidence across Alabama’s metro areas is mostly positive in Q2 2024, with business leaders in all but Montgomery forecasting growth compared to the previous quarter. Tuscaloosa had the highest metro ABCI with a moderately confident 57.1, followed closely by Huntsville with 55.1. Panelists in Birmingham–Hoover and Mobile had mildly confident expansionary forecasts of 53.5 and 52.8, respectively. Montgomery, who had the highest MSA ABCI last quarter at a mildly positive 51.9, dropped almost 6 points to a mildly negative index of 46.1.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the second quarter 2024 ABCI™ survey. This is the 90th 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 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.