Montgomery Metro Area Report

Alabama Business Confidence Index™

Second Quarter 2021

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Confidence in Montgomery Continues to Strengthen in Q2 2021

Businesses confidence is high in the Montgomery metro area as the country passes the one-year anniversary of the beginning of the COVID pandemic. Heading into the second quarter of 2021, the metro’s ABCI increased 5.2 points to register at 63.8. All of the component indexes registered above 55, indicating moderate to very strong confidence in their positive expectations. Confidence in the forecasts for improved conditions in the Alabama and U.S. economies were especially strong this quarter with indexes over 70. This is the third consecutive quarter Montgomery business leaders have forecasted growth with moderate to strong confidence, indicating sustained expectations for growth.

Second Quarter 2021 Outlook

Montgomery Statewide
ABCI 63.8 64.3
Alabama Economy 71.7 70.7
US Economy 70.0 63.6
Industry Sales 65.8 68.4
Industry Profits 59.2 61.3
Industry Hiring 60.0 62.3
Industry Capital Expenditures 55.8 59.7

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: Metro panelists are optimistic about growth in the Alabama economy this quarter with a very positive index of 71.7 after increasing 7.2 points from Q1 2021. This is the metro’s highest component index for the quarter.
  • US Economy: Montgomery business leaders are anticipating growth in the U.S. economy this quarter with a strongly confident index of 70.0. This is 10.8 points above the Q1 2021 index.
  • Industry Sales: The metro sales index is the highest industry index this quarter at confident 65.8, after increasing 1.3 points from Q1 2021. This indicates strong expectations for sales growth compared to the previous quarter.
  • Industry Profits: Area business leaders expressed moderate confidence in increased profits this quarter. The index increased 5.3 points to register at 59.2 for Q2 2021.
  • Industry Hiring: With an index of 60.0, hiring is forecast to continue growing in the upcoming quarter with strong confidence. This is a 0.8-point increase from Q1 2021.
  • Industry Capital Expenditures: This quarter, Montgomery panelists forecast an increase in capital expenditure compared to Q1 2021 with moderate confidence. The index increased 5.8 points to reach 55.8 in the Q2 2021 survey.

 

Montgomery Response Breakdown

Historical Montgomery ABCI™ and Industry Component Indexes

ABCI Montgomery in Context

Montgomery’s ABCI registered at a strongly confident 63.8 this quarter, after increasing 5.2 points from Q1 2021’s moderately confident index of 58.6. Though the Q3 2020 ABCI was very close to the neutral 50, business leaders in Montgomery have been very optimistic about the city’s economic growth since Q4 2020. The metro’s ABCI registered from moderate to strong for the last three quarters, indicating sustained expectations for economic improvements and growth.

Confidence soared across the state in the Q2 2021 survey with all metro ABCIs registering above 63. Business confidence was highest in Tuscaloosa with an ABCI of 65.6, followed closely by Birmingham-Hoover at 65.5. Mobile’s ABCI reached 64.6 this quarter while Huntsville and Montgomery both had ABCIs of 63.8 for the quarter. All of the metros communicated incredibly favorable forecasts for all of the component indexes but especially the Alabama economic outlook and the industry sales index.

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 second quarter 2021 ABCI™ survey. This is the 78th 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 2021.

 

  &  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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