Montgomery Metro Area Report

Alabama Business Confidence Index™

Third Quarter 2021

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Return of Strong Business Confidence in Q3 2021

Business leaders in Montgomery are feeling strongly optimistic about growth in the third quarter 2021 Alabama Business Confidence Index (ABCI) survey. The metro’s ABCI registered at a strongly confident 70.6 this quarter, an increase of 9.6 points from Q2 2021. Montgomery’s ABCI has been moderately or strongly positive since it registered at a neutral 51.0 in Q3 2020, as the country was first navigating the COVID-19. Now, more than a year later, panelists are expressing strongly confident expectations for improved conditions for all six of the component indexes, with three of the six registering above 73 for the Q3 2021 survey.

Third Quarter 2021 Outlook

Montgomery Statewide
ABCI 70.6 67.0
Alabama Economy 79.4 73.2
US Economy 73.5 65.8
Industry Sales 73.5 68.1
Industry Profits 67.6 64.8
Industry Hiring 67.6 66.4
Industry Capital Expenditures 61.8 63.5

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: The Alabama outlook index increased 7.7 points to reach 79.4 this quarter, indicating very strong confidence in improved statewide economic conditions compared to the previous quarter.
  • US Economy: Panelists in Montgomery are anticipating an improvement over last quarter’s conditions in the national economy, with a strongly positive index of 73.5. This index is 3.5 points above the Q2 2021 U.S. outlook.
  • Industry Sales: Business leaders in Montgomery are forecasting an increase in sales this quarter with the most confident component index of 73.5. This is a 7.7-point increase from Q2 2021’s strongly confident index and signals that Montgomery business leaders expect sales to continue increasing in the third quarter of 2021.
  • Industry Profits: Metro panelists are anticipating increased levels of profits this quarter with a very confident index of 67.6, an increase of 8.4 points from Q2 2021.
  • Industry Hiring: After increasing 7.6 points to register at 67.6 Montgomery business leaders are forecasting increased hiring in Q3 2021 compared to Q2 2021 with strong confidence.
  • Industry Capital Expenditures: With a strongly positive index of 61.8 after a 6.0-point increase from the previous quarter, Montgomery business leaders are expecting to increase their capital expenditures compared to Q2 2021.

 

Montgomery Response Breakdown

Historical Montgomery ABCI™ and Industry Component Indexes

ABCI Montgomery in Context

In the Q3 2021 survey, Montgomery’s business leaders surpassed their pre-COVID-19 levels of confidence with their extremely confident positive forecast. In the year leading up to Q2 2020, the metro’s forecasts fluctuated a fair amount, with indexes as low as 47.5 in Q3 2019 and as high as 68.1 in Q1 2020. Now, more than a year after the U.S. pandemic began, business leaders have been forecasting growth with moderate or strong confidence for the last four quarters with ABCIs ranging from 58.6 to 70.6. These higher ABCIs indicate sustained expectations for growth as the metro area continues to recover from the impact of COVID-19.

Business leaders across the state’s metro areas are forecasting growth in Q3 2021 with especially strong confidence in improved statewide economic conditions, industry sales, and hiring. Montgomery had the highest metro ABCI at 70.6, indicating very confident expectations for growth compared to Q2 2021. Tuscaloosa, Birmingham-Hoover, and Huntsville followed closely with respective indexes of 68.2, 67.2, and 66.4. Mobile had the lowest Q3 2021 metro ABCI at 61.3, which still indicates strong confidence in growth compared to the previous quarter.

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 third quarter 2021 ABCI™ survey. This is the 79th consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the September 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the fourth 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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