Alabama Business Confidence Index
Alabama Business Confidence Index™
Fourth Quarter 2024
Download the Full ReportMild Confidence in Q4
Though the Alabama Business Confidence Index (ABCI) decreased by 2.6 points in the Q4 2024 survey, panelists are expecting an overall continuation of last quarter’s economic conditions with a neutral ABCI of 49.5. Most of the component indexes decreased compared to Q3 2024, though only three were below 50, indicating contractionary forecasts for Q4 2024. The US economic outlook was the only component index to increase from last quarter, though it remained contractionary for the twelfth consecutive quarter.
Fourth Quarter 2024 Outlook
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Index above 50 indicates positive outlook as compared to last quarter.
Index below 50 indicates negative outlook compared to last quarter.
Statewide Component Index Analysis
- Alabama Economy: The Q4 2024 index for the Alabama economy decreased 1.4 points from the mildly expansionary outlook in Q3 2024 to register at a mildly expansionary 50.6, with almost 50 percent of panelists expecting a continuation of last quarter’s economic conditions.
- US Economy: Business leaders throughout the state are still forecasting worse conditions in the US economy but with a mildly confident index of 45.3. This is 2.8 points higher than the Q3 2024 outlook.
- Industry Sales: Despite decreasing 3.2 points to register at a mildly expansionary 53.6 for Q4 2024, the industry sales index remained the highest component index for the third consecutive quarter.
- Industry Profits: Expectations for industry profits are neutral this quarter with an index of 50.3. This is 1.5 points below Q3 2024’s mildly expansionary profits index.
- Industry Hiring: For the first time since Q1 2014, the Q4 2024 hiring index registered as mildly contractionary, decreasing 6.6 points from last quarter to reach 47.8. Almost 55 percent of panelists expect to continue hiring at the same rate as last quarter, but 25.8 percent expect a moderate or strong decrease in hiring compared to the hiring rate in the third quarter.
- Industry Capital Expenditures: The capital expenditures index registered at a very mildly contractionary 49.4 this quarter after decreasing 5.5 points from Q3 2024.
Statewide Response Breakdown
Statewide Response BreakdownParticipants’ responses reported as percentages |
| Much Worse | Somewhat Worse | No Change | Somewhat Better | Much Better | |
|---|---|---|---|---|---|
| Alabama Economy | 0.0 | 25.2 | 49.1 | 23.9 | 1.9 |
| US Economy | 6.3 | 30.2 | 40.9 | 21.4 | 1.3 |
| Industry Sales | 3.1 | 20.1 | 37.7 | 37.1 | 1.9 |
| Industry Profits | 2.5 | 24.5 | 44.0 | 27.0 | 1.9 |
| Industry Hiring | 3.8 | 22.0 | 54.7 | 18.2 | 1.3 |
| Industry Capital Expenditures | 5.7 | 22.0 | 44.0 | 25.8 | 2.5 |
Historical ABCI™ and Industry Component Indexes
Historical ABCI™ and Economic Outlook Component Indexes
CBER’s Forecast for Alabama
The Center for Business and Economic Research is still forecasting a 2.4-percent increase in Alabama GDP for 2024, which is very close to the 2.5-percent growth seen in 2023. Alabama employment in 2024 is expected to grow by 2.0 percent, which is slightly above 2023’s 1.8 percent. CBER anticipates that the state’s total tax receipts will grow by 2.0 percent this year, which is below the 3.2-percent increase seen in 2023.
Lowered Confidence in AL’s Largest Metros
Business confidence in Alabama’s metros varied this quarter. Tuscaloosa had the highest Q4 2024 metro ABCI at 53.4, with expansionary outlooks for all component indexes. Panelists in Huntsville are expecting a continuation of last quarter’s conditions for four of their six component indexes, along with a moderately negative forecast for the US economy and a mildly positive outlook for industry sales, resulting in an ABCI of 49.2. The Birmingham-Hoover ABCI was mildly negative at 47.2 this quarter with moderately contractionary forecasts for hiring, the US outlook, and capital spending. There were not enough responses from Mobile and Montgomery to have insight into the individual metros.
ABCI by Metro Area
Metropolitan Statistical Area (MSA): Fourth Quarter 2024 Outlook |
| Statewide | Birmingham–Hoover | Huntsville | Mobile | Montgomery | Tuscaloosa | |
|---|---|---|---|---|---|---|
| ABCI | 49.5 | 47.2 | 49.2 | — | — | 53.4 |
| Alabama Economy | 50.6 | 46.7 | 50.5 | — | — | 53.9 |
| US Economy | 45.3 | 42.5 | 42.5 | — | — | 52.6 |
| Industry Sales | 53.6 | 55.8 | 52.8 | — | — | 59.2 |
| Industry Profits | 50.3 | 53.3 | 50.0 | — | — | 52.0 |
| Industry Hiring | 47.8 | 40.8 | 49.5 | — | — | 52.0 |
| Industry Capital Expenditures | 49.4 | 44.2 | 50.0 | — | — | 50.7 |
Industry Expectations Decrease from Last Quarter and Remain Varied in Q4 2024
Industry indexes decreased for all but one of industry group this quarter. The industry index only includes panelists’ forecasts for their own industry sales, profits, hiring, and capital expenditures, thus offering unique insight into panelists’ expectations for their specific industries. In the Q3 2024 survey, six of the nine industry groups forecasted growth compared to the previous quarter, with mild to very strong confidence. In Q4 2024, only two groups are continuing to anticipate growth with expansionary industry indexes: finance, insurance, and real estate, as well as “all other services”, which includes management of companies and enterprises; education services; arts, entertainment, and recruitment; accommodation and food services; and other services that don’t fit into the survey’s other categories. Construction had the only neutral industry index, indicating overall expectations for a continuation of last quarter’s levels of growth. The remaining industry groups had contractionary forecasts for Q4 2024 compared to the previous quarter, with confidence levels ranging from mild to moderate.
Industry Component Index: Fourth Quarter 2024 Outlook |
| Industry Index | Change from Q3 | Sales | Profits | Hiring | Capital Expenditures | |
|---|---|---|---|---|---|---|
| All Other Services | 53.2 | -2.4 | 59.0 | 53.2 | 47.4 | 53.2 |
| Finance/Insurance/Real Estate | 52.9 | -0.5 | 56.2 | 55.4 | 47.3 | 52.7 |
| Statewide | 50.3 | -4.2 | 53.6 | 50.3 | 47.8 | 49.4 |
| Construction | 50.0 | -9.9 | 52.1 | 50.0 | 52.1 | 45.8 |
| Manufacturing | 49.0 | -7.3 | 47.9 | 47.9 | 50.0 | 50.0 |
| Professional/Scientific/Technical Services | 48.6 | -5.0 | 48.4 | 48.4 | 46.1 | 51.6 |
| Healthcare/Social Assistance Services | 47.4 | -2.0 | 54.2 | 45.8 | 50.0 | 39.6 |
| Retail Trade | 45.6 | 1.9 | 52.5 | 42.5 | 50.0 | 37.5 |
| Wholesale Trade | 43.8 | -3.1 | 50.0 | 45.0 | 40.0 | 40.0 |
| Transportation/Information/Utilities | 42.5 | -22.8 | 45.0 | 45.0 | 40.0 | 40.0 |
The Industry Index only includes panelists’ forecasts for their industry sales, profits, hiring, and capital expenditure, and does not include the Alabama or US outlooks.
- Industry Sales: The majority of industry groups are continuing to forecast increased sales this quarter, despite mostly decreasing from their Q3 2024 levels. Five of the nine industry groups are anticipating growth in their sales this quarter with mild to moderate confidence. Panelists in “all other categories” had the highest sales index with a moderately confident 59.0, which is only 0.8 points below their Q3 2024 sales index, indicating sustained expectations for growth. Only three industry groups had mildly confident forecasts for a contraction in sales: manufacturing; professional, scientific, and technical services; and transportation, information, and utilities.
- Industry Profits: In contrast, the indexes for industry profits were largely contractionary this quarter. Six industry groups had contractionary forecasts for their Q4 profits, with confidence levels ranging from very mild (48.4) to moderate (42.5). The profits index for construction is a neutral 50, signaling expectations for a continuation of last quarter’s profit levels. Only business leaders in finance, insurance, and real estate and “all other services” are anticipating an increase in this quarter’s profits compared to Q3 2024.
- Industry Hiring: Only one industry group is expecting to increase hiring this quarter: construction. Business leaders in the remaining groups are either anticipating an overall continuation of last quarter’s hiring levels with neutral indexes of 50 or are forecasting decreased hiring compared to the previous quarter. The contractionary indexes included three mildly negative forecasts with values ranging from 46.1 to 47.4 and two strongly negative forecasts with indexes of 40.
- Industry Capital Expenditures: The forecasts for capital expenditures continue to have a slightly larger spread in value than the other component indexes. This quarter, “all other services” had the highest capital spending index at a mildly expansionary 53.2, which was 15.7 points higher than retail trade’s strongly contractionary index of 37.5. Three industry groups expect to increase their capital spending this quarter with mild confidence; manufacturing is the only group to anticipate a continuation of last quarter’s levels; and business leaders in the five remaining industry groupings forecast decreased capital spending compared to Q3 2024 with confidence ranging from mild to strong.
Firm Size: Fourth Quarter 2024 Outlook |
| Number of Employees | |||
|---|---|---|---|
| 0 to 19 | 20 to 99 | 100+ | |
| ABCI | 50.8 | 47.4 | 49.4 |
| Alabama Economy | 52.6 | 50.6 | 46.8 |
| US Economy | 46.1 | 43.0 | 46.2 |
| Industry Sales | 55.8 | 49.4 | 53.8 |
| Industry Profits | 51.3 | 47.1 | 51.9 |
| Industry Hiring | 47.7 | 48.3 | 47.4 |
| Industry Capital Expenditures | 51.0 | 45.9 | 50.0 |
Similar Forecasts from Small and Large Firms
- Business leaders across firm sizes had similar forecasts for several of the component indexes this quarter, with contractionary expectations for the US outlook and hiring in all three firm-size groupings. However, panelists at small firms, those with fewer than 20 employees, had higher expectations for industry sales and the Alabama economy than their counterparts and are expecting growth in profits and capital expenditures with mild confidence compared to last quarter, resulting in an overall mildly expansionary ABCI of 50.8 for the quarter.
- The ABCI for large firms, those with 100 or more employees, was slightly contractionary this quarter with a mildly confident index of 49.4. Though they are anticipating decreased hiring compared to Q3 2024, these business leaders expect sales and profits to increase with mild confidence and capital expenditure to continue at a similar rate as last quarter.
- Panelists in mid-sized firms, those with between 20 to 99 employees, had slightly lower indexes than their counterparts and a mildly contractionary overall ABCI of 47.4. Their Alabama economic outlook was more optimistic than that of large firms, but business leaders in mid-sized businesses are expecting contractions in all of the industry component indexes with mild confidence.
The Center for Business and Economic Research would like to thank the 159 Alabama business executives who completed the fourth quarter 2024 ABCI survey. This is the 92nd 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 2025.
Analysis provided by Susannah Robichaux, Socioeconomic Analyst, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.