Alabama Business Confidence Index

Alabama Business Confidence Index™

First Quarter 2024

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Overall Economic Outlook Slightly Contractionary in Q1 2024

The Alabama Business Confidence Index (ABCI) remained mildly contractionary in the Q1 2024 survey after increasing 1.1 points from last quarter. Business leaders are feeling very mildly confident in their forecasts for the quarter, with five of the six component indexes registering at or within two points of the neutral 50: three slightly above 50, one at 50, and one slightly below. The one outlier this quarter is the US economic outlook, which registered the highest point increase from last quarter but remained moderately contractionary at 43.0.

First Quarter 2024 Outlook


Statewide Change from Q4
ABCI 49.3 1.1
Alabama Economy 51.7 3.7
US Economy 43.0 5.3
Industry Sales 51.4 -1.9
Industry Profits 48.3 -0.5
Industry Hiring 51.3 -0.4
Industry Capital Expenditures 50.0 0.6

 

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 Q1 2024 economic outlook is mildly expansionary after growing 3.7 points from last quarter’s mildly contractionary forecast to reach 51.7 this quarter.
  • US Economy: The US economic outlook remained negative this quarter, registering at a moderately contractionary 43.0 after increasing 3.7 points from last quarter. The index has been steadily increasing since its low of 29.3 in Q3 2022, though a slight majority of 41.5 percent of panelists are still expecting worse conditions in the coming quarter.
  • Industry Sales: Despite decreasing 1.9 points from last quarter, sales are still expected to continue increasing this quarter with a mildly expansionary index of 51.4.
  • Industry Profits: The Q1 2024 forecast for industry profits remained mildly contractionary at 48.3 after decreasing 0.5 points from last quarter. The profits index has been contractionary six of the seven most recent quarters.
  • Industry Hiring: With an index of 51.3 after a 0.4-point decrease from the previous quarter, business leaders are expecting hiring to continue increasing in Q1 2024 with mild confidence.
  • Industry Capital Expenditures: The capital expenditures index increased 0.6 points to reach 50.0 this quarter. This neutral index indicates expectations for a continuation of last quarter’s levels of capital spending.

Statewide Response Breakdown

Statewide Response Breakdown

Participants’ responses reported as percentages


Much Worse Somewhat Worse No Change Somewhat Better Much Better
Alabama Economy 0.0 19.9 54.5 24.4 1.1
US Economy 5.1 36.4 40.9 16.5 1.1
Industry Sales 4.0 25.6 34.1 33.5 2.8
Industry Profits 2.3 30.7 39.8 26.1 1.1
Industry Hiring 2.8 14.8 57.4 24.4 0.6
Industry Capital Expenditures 4.5 23.9 39.2 31.8 0.6

 

 

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 forecasting a 0.7-percent increase in Alabama GDP for 2024, a slowdown from the forecasted 1.4 percent growth of 2023. Similarly, growth in Alabama employment is slow in 2024, increasing by 0.8 percent compared to 2023’s 1.7 percent. CBER anticipates that the state’s total tax receipts will grow by 1.4 percent this year, which is below the 3.2-percent increase seen in 2023.

Metros Evenly Split into Mildly Expansionary and Contractionary Forecasts

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

Metropolitan Statistical Area (MSA): First Quarter 2024 Outlook


Statewide Birmingham–Hoover Huntsville Mobile Montgomery Tuscaloosa
ABCI 49.3 47.4 48.3 51.9 50.9
Alabama Economy 51.7 49.2 51.4 55.4 51.8
US Economy 43.0 40.8 41.3 48.2 44.0
Industry Sales 51.4 50.8 48.6 51.8 56.0
Industry Profits 48.3 45.0 46.6 51.8 51.8
Industry Hiring 51.3 50.0 52.4 50.9 52.4
Industry Capital Expenditures 50.0 48.3 49.5 53.6 49.4

 

Decreased Confidence in Most Industries

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 Q1 2024, all but two industries either decreased or remained at similar levels as their Q4 2024 industry index. Business leaders in construction had the largest increase in confidence this quarter, with their industry index gaining 11.4 points to reach a strongly expansionary 60.9 and the highest individual indexes for all components. Manufacturing was the only other industry index to increase this quarter, though their Q1 2024 index remained mildly contractionary despite growing by 2.6 points. Business leaders in finance, insurance, and real estate ultimately remained at the exact same overall confidence level as in Q4 2023 industry index, though their sales and profits indexes increased in Q1 2024 while their hiring and capital expenditures indexes decreased compared to the previous quarter. Panelists in healthcare and social assistance services had the largest decrease in industry confidence this quarter, with their index decreasing from a neutral outlook in Q4 2023 to a moderately contractionary forecast in Q1 2024.

As a note, “all other services” is the category that 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. Unfortunately, retail trade and wholesale trade did not have enough participation in the Q1 2024 survey to calculate individual industry indexes.

Industry Component Index: First Quarter 2024 Outlook


Industry Index Change from Q4 Sales Profits Hiring Capital Expenditures
Construction 60.9 11.4 62.5 60.4 62.5 58.3
All Other Services 52.8 -3.4 51.6 49.2 55.5 54.7
Professional/Scientific/Technical Services 50.8 -2.5 53 50.6 51.2 48.2
Statewide 50.2 -0.6 51.4 48.3 51.3 50
Transportation/Information/Utilities 50.0 -0.9 50 40.6 53.1 56.2
Finance/Insurance/Real Estate 48.8 -0.0 52.6 50 44.7 48
Manufacturing 47.8 2.6 47.5 46.2 51.2 46.2
Healthcare/Social Assistance Services 46.9 -5.3 47.9 41.7 56.2 41.7
Retail Trade
Wholesale Trade

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. Data for retail and wholesale trade is not available due to insufficient participation.

 

  • Industry Sales: Confidence in the forecasts for industry sales was primarily mild this quarter: three of the seven industry sales indexes had mildly expansionary outlooks, one had a neutral index, and two had mildly contractionary expectations. Only construction was an outlier this quarter with a strongly positive sales index of 62.5. This is 10.7 points above the construction industry’s Q4 2023 sales index and indicates strong confidence in their forecast for increased sales in Q1 2024 compared to last quarter.
  • Industry Profits: Forecasts for industry profits were mostly neutral or contractionary this quarter with the exception of construction, whose index jumped 14.0 points from mildly contractionary in Q4 2023 to strongly expansionary in Q1 2024. Three industries are expecting a continuation of last quarter’s profit levels with indexes within one point of the neutral 50, and the remaining three industries are forecasting decreased profits this quarter with mild to moderate confidence.
  • Industry Hiring: The hiring indexes were much more optimistic for most industries this quarter. Only the hiring index for finance, insurance, and real estate indicates expectations for decreased hiring this quarter. The remaining industries all anticipate an increase in hiring compared to last quarter with confidence indexes ranging from mild to moderate and strong.
  • Industry Capital Expenditures: In the Q1 2024 survey, expectations for industry capital expenditures were split with three expansionary forecasts and four contractionary. Business leaders in construction and in transportation, information, and utilities were on the upper end with moderately strong confidence in their positive outlook, while panelists in healthcare and social assistance were on the lower end of the spectrum with a moderately strong confidence in their negative outlook.

 

Firm Size: First Quarter 2024 Outlook


Number of Employees
0 to 19 20 to 99 100+
ABCI 49.2 48.9 49.7
Alabama Economy 53.5 50.5 50.4
US Economy 43.1 41.8 44.0
Industry Sales 51.4 49.5 53.0
Industry Profits 47.6 48.4 49.1
Industry Hiring 50.0 52.2 52.2
Industry Capital Expenditures 49.7 51.1 49.6

Overall Confidence Similar across Firm Sizes

  • ABCI by firm size was pretty clustered this quarter with only a 0.8-point difference between large firms’ neutral index of 49.7 and mid-sized firms’ mildly contractionary index of 48.9. Though all three groupings of firms had similar ABCIs, there was a little more nuance in the breakdown by component indexes. Large firms, those with over 100 or more employees, had a Q1 2024 ABCI of 49.7, which is just 0.7 points below their Q4 2023 index. Panelists at these firms remain mildly optimistic about increased sales and hiring this quarter, but they expect capital expenditures and profits to decrease, though with very mild confidence.
  • Mid-sized firms, those with between 20 to 99 employees, had a mildly contractionary ABCI of 48.9 this quarter, which is 2.4 points above their Q4 2023 index. Mid-sized firms had the only expansionary capital expenditures index this quarter, though they were the only grouping to have a negative sales index.
  • Panelists in small firms, those with fewer than 20 employees, had a mildly contractionary ABCI of 49.2 this quarter after increasing 1.4 points from last quarter. Business leaders at small firms had a more positive outlook for the statewide economy than their peers but lower profits and hiring indexes.
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The Center for Business and Economic Research would like to thank the 176 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.

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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