Montgomery Metro Area Report

Alabama Business Confidence Index™

First Quarter 2024

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Business Confidence Remains Mildly Expansionary

Montgomery’s ABCI grew 0.4 points to remain mildly confident in the Q1 2024 survey, signaling continued expectations for economic expansion compared to the last quarter. Metro business leaders are most optimistic about growth in the Alabama economy and increased capital expenditures, though five of the six component indexes registered above the neutral 50 this quarter. Only the U.S. economic outlook remained contractionary with a mildly negative index of 48.2. This is the second consecutive quarter that the metro’s outlook has been expansionary, indicating sustained expectations for growth.

First Quarter 2024 Outlook

Montgomery Statewide
ABCI 51.9 49.3
Alabama Economy 55.4 51.7
US Economy 48.2 43.0
Industry Sales 51.8 51.4
Industry Profits 51.8 48.3
Industry Hiring 50.9 51.3
Industry Capital Expenditures 53.6 50.0

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: Montgomery’s economic index for Alabama increased 5.4 points to reach a moderately expansionary 55.4 in the Q1 2024 survey. This is the metro’s first positive forecast for the statewide economy in two years.
  • US Economy: The metro’s US economic outlook grew by an impressive 9.4 points from last quarter to reach a mildly contractionary index of 48.2.
  • Industry Sales: Business leaders are forecasting an increase in sales this quarter though with milder confidence. Montgomery’s sales index registered at 51.8, which, though still expansionary, is 7.0 points lower than the Q4 2023 index.
  • Industry Profits: Montgomery’s outlook for industry profit remained mildly expansionary this quarter at 51.8 after a 0.7-point decrease from Q4 2023.
  • Industry Hiring: Almost two-thirds of metro panelists are expecting to continue hiring at the same rate as last quarter, resulting in an almost neutral but slightly expansionary index of 50.9 for Q1 2024, which is 5.3 points below last quarter’s index of 56.2.
  • Industry Capital Expenditures: The metro’s capital spending index has continued to inch upwards, increasing 1.1 points from Q4 2023 to register at a mildly expansionary 53.6 this quarter.

 

Montgomery Response Breakdown

Historical Montgomery ABCI™ and Industry Component Indexes

Historical Montgomery ABCI™ and Economic Outlook Component Indexes

ABCI Montgomery in Context

Montgomery’s business confidence has been steadily increasing over the last four quarters and has been mildly positive for two consecutive quarters now. In Q1 2023, Montgomery’s ABCI reached 42.9, which was the lowest the index had been since 2009. This was in part due to the metro’s strongly contractionary forecast for the US economy, but expectations for industry sales, profits, and hiring were also quite low that quarter. However, in the subsequent quarters, Montgomery’s business leaders have expressed more optimism about industry performance, with forecasts for growth in all four industry component indexes for the last two quarters, resulting in an overall expansionary ABCI.

Forecasts by metro area ranged from mildly contractionary to mildly expansionary in Q1 2024. Birmingham–Hoover and Huntsville had mildly contractionary outlooks, with ABCIs of 47.4 and 48.3, respectively. Tuscaloosa had a mildly expansionary outlook of 50.9, pulled up by their moderately confident forecast for increased sales that was the highest index across any metro. Montgomery had the highest metro ABCI this quarter, with an index of 51.9 and mildly optimistic forecasts for five of their six component indexes. There was not enough participation to include Mobile’s outlook this 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 first quarter 2024 ABCI™ survey. This is the 89th consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the March 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the second quarter of 2024.

 

  &  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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