Montgomery Metro Area Report

Alabama Business Confidence Index™

Fourth Quarter 2021

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Montgomery Confidence Decreased but Remained Positive in Q4 2021

Business confidence in Montgomery is more modest this quarter, according to the Q4 2021 Alabama Business Confidence Index (ABCI) survey. The metro’s ABCI registered at a moderately confident 55.9 this quarter, which is a 14.7-point decrease from the strongly confident Q3 2021 ABCI of 70.6. This quarter’s drop in business confidence may be reflective of the higher level of uncertainty as Alabama grapples with the highly contagious Delta variant. Though this quarter’s ABCI is lower than the previous four quarter’s, Montgomery business leaders are still forecasting growth in the industry indexes with mild to strong confidence.

Fourth Quarter 2021 Outlook

Montgomery Statewide
ABCI 55.9 58.0
Alabama Economy 55.7 58.9
US Economy 50.0 50.7
Industry Sales 62.5 60.6
Industry Profits 53.4 56.6
Industry Hiring 59.1 62.0
Industry Capital Expenditures 54.5 59.2

Index above 50 indicates positive outlook as compared to last quarter.
Index below 50 indicates negative outlook compared to last quarter.

Montgomery Component Index Analysis

  • Alabama Economy: Confidence in an improved Alabama economy in Q4 compared to Q3 2021 was only moderately positive. The index registered at 55.7 after decreasing 23.7 points from Q3 2021’s record high index of 79.4.
  • US Economy: Overall, expectations for the U.S. economy are neutral: the index registered at 50.0 in the Q4 2021 survey after decreasing 23.5 points from Q3 2021’s strongly confident index.
  • Industry Sales: Montgomery’s outlook for industry sales decreased 11.0 points from Q3 2021 to register at 62.5, the highest index this quarter. Despite the lower index, Montgomery panelists are still expressing strong confidence in increased sales for Q4 2021.
  • Industry Profits: Business leaders in Montgomery are tentatively expecting increased profits this quarter with a mildly confident index of 53.4, which is a 14.2-point decrease from the Q3 2021 index.
  • Industry Hiring: The Montgomery hiring index registered at a moderately strong 59.1 in Q4 2021. This is 8.5 points below the previous quarter’s index, but still forecasts increased hiring with a fair amount of confidence.
  • Industry Capital Expenditures: With a sales index of 54.5 after a 7.3-point decrease, Montgomery panelists are mildly confident when forecasting increased capital expenditure levels in Q4 2021.

 

Montgomery Response Breakdown

Historical Montgomery ABCI™ and Industry Component Indexes

ABCI Montgomery in Context

Montgomery business confidence is somewhat dampened compared to the previous four quarters, but metro panelists are still forecasting growth in Q4 2021. After registering at a neutral 51.0 the quarter after the COVID-19 pandemic was declared a national emergency, the Montgomery ABCI rebounded fairly quickly as panelists forecasted better economic conditions in the next quarter with strong confidence in Q4 2020, Q2 2021, and Q3 2021. While this quarter’s ABCI of 55.9 remains positive, it signals that business leaders are feeling less confident anticipating better economic conditions heading into the last quarter of 2021 despite their expectations for increased industry sales and hiring.

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

Montgomery 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.

 

  &  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 Montgomery Chamber of Commerce.

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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