Alabama Business Confidence Index

Alabama Business Confidence Index™

Third Quarter 2023

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Neutral Overall Forecast in Q3 2023

The Alabama Business Confidence Index (ABCI) grew 1.3 points from last quarter to register at a neutral 49.7 in the Q3 2023 survey. Being so close to 50, this index indicates overall expectations for a continuation of last quarter’s economic performance. Alabama business leaders are most confident anticipating increased sales this quarter, and for the first time since Q2 2022, five of the six component indexes are above 50 with neutral or mildly positive forecasts. The only component index to remain negative this quarter is US economic outlook, which has been below 50 for seven consecutive quarters.

Third Quarter 2023 Outlook

Statewide Change from Q2
ABCI 49.7 1.3
Alabama Economy 51.9 3.9
US Economy 39.3 3.3
Industry Sales 54.0 -0.7
Industry Profits 50.3 1.6
Industry Hiring 51.8 -3.2
Industry Capital Expenditures 51.2 3.3


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: Economic conditions in Alabama are expected to improve this quarter with a mildly positive outlook of 51.9. This index had the highest increase from last quarter, growing 3.9 points from Q2 2023’s mildly negative outlook.
  • US Economy: Despite increasing by 3.3 points from last quarter, the Q3 2023 US economic index remained strongly negative at 39.3. This index has been negative for the past seven quarters and the lowest component index for the past eight quarters, indicating sustained expectations for worse national economic conditions.
  • Industry Sales: With an index of 54.0 after a 0.7-point decrease, business leaders are expecting sales to increase with mild confidence in Q3 2023. This is the quarter’s highest ABCI component index.
  • Industry Profits: The profits index grew 1.6 points to register at a neutral 50.3, indicating expectations for a continuation of last quarter’s levels of profits.
  • Industry Hiring: The Q3 2023 hiring index fell 3.2 points to register at a mildly positive 51.8. After seven quarters of being the highest component index, the hiring index is now the third highest ABCI component index.
  • Industry Capital Expenditures: Alabama panelists are forecasting increased capital expenditures this quarter with a mildly positive index of 51.2. This is a 3.3-point increase from last quarter’s mildly negative outlook.

Statewide Response Breakdown

Statewide Response Breakdown

Participants’ responses reported as percentages

Much Worse Somewhat Worse No Change Somewhat Better Much Better
Alabama Economy 0.5 21.3 49.7 26.8 1.6
US Economy 4.9 47.5 33.9 12.6 1.1
Industry Sales 1.6 22.4 36.1 38.3 1.6
Industry Profits 3.3 26.2 38.3 30.6 1.6
Industry Hiring 4.4 13.1 55.2 25.7 1.6
Industry Capital Expenditures 3.3 18.6 50.3 25.7 2.2



CBER’s Forecast for Alabama

The Center for Business and Economic Research has revised its forecast up, estimating a 1.3-percent increase in Alabama GDP for 2023. This is a slightly slower rate of growth than seen in 2022. Alabama employment growth is also expected to slow from last year’s rate of 3.0 to be 1.5 in 2023. CBER expects total tax receipts to grow by 2.3 percent this year, which is a significant decrease from last year’s 15.2-percent increase.

Huntsville Leads in Metro Confidence

Business confidence across metros varied in the Q3 2023 survey. For the second consecutive quarter, Huntsville was the only metro with a positive ABCI and positive forecasts for all industry component indexes. Tuscaloosa’s ABCI was mildly negative with positive forecasts for hiring and the AL economy. Montgomery and Birmingham–Hoover followed next with mostly negative component indexes but expectations for capital expenditure growth. Mobile had the lowest ABCI this quarter at a moderately negative 43.0.

ABCI by Metro Area

Metropolitan Statistical Area (MSA): Third Quarter 2023 Outlook

Statewide Birmingham–Hoover Huntsville Mobile Montgomery Tuscaloosa
ABCI 49.7 46.2 55.1 43.0 46.6 48.0
Alabama Economy 51.9 50.0 54.9 50.0 48.5 51.0
US Economy 39.3 34.4 44.3 34.4 36.8 38.0
Industry Sales 54.0 50.0 62.5 42.2 48.5 49.5
Industry Profits 50.3 49.0 56.4 40.6 44.1 46.4
Industry Hiring 51.8 41.7 57.6 48.4 50.0 52.6
Industry Capital Expenditures 51.2 52.1 54.5 42.2 51.5 50.5


Outlook Varies by Industry

This quarter, six of the nine industry groupings had an industry index above 50. The industry index only includes panelists’ forecasts for their own industry sales, profits, hiring, and capital expenditures, thus offering unique insight into panelists’ own expectations for their industry. The number of industries with a positive outlook has been growing over the last three quarters, with only two positive industry indexes in Q1 2023 and four in Q2 2023. In the Q3 2023 ABCI survey, professional, scientific, and technical services had the highest industry index at 58.8, with moderate to strongly positive forecasts for all their component indexes. The industry index for healthcare and social assistance had the highest increase from last quarter, growing 8.6 points from a mildly negative 46.7 to a moderately confident 55.3. Three industries had a negative industry index for the quarter, with retail trade coming in lowest at a moderately negative 41.4 and negative forecasts for all industry component indexes. 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.

Industry Component Index: Third Quarter 2023 Outlook

Industry Index Change from Q2 Sales Profits Hiring Capital Expenditures
Professional/Scientific/Technical Services 58.0 5.9 60.2 55.5 59.4 57.0
Healthcare/Social Assistance Services 55.3 8.6 57.7 53.8 63.5 46.2
Construction 53.2 -0.1 55.4 53.6 55.4 48.2
Wholesale Trade 52.5 4.6 55.0 50.0 45.0 60.0
Manufacturing 52.1 -3.9 55.6 54.2 52.8 45.8
Statewide 51.8 0.2 54.0 50.3 51.8 51.2
All Other Services 50.5 -6.2 54.3 48.4 47.9 51.6
Finance/Insurance/Real Estate 48.3 5.7 49.3 45.6 47.8 50.7
Transportation/Information/Utilities 45.5 -2.1 46.4 50.0 35.7 50.0
Retail Trade 41.4 -2.3 37.5 37.5 46.9 43.8

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: Two-thirds of the industry groups have mild to strongly confident expectations for sales growth in Q3 2023 with indexes above 54.0. Professional, scientific, and technical services had the highest industry sales index this quarter at a strongly positive 60.2. For the three industries with an index below 50, forecasts varied: panelists in finance, insurance, and real estate are anticipating a continuation of last quarter’s levels of sales with a neutral index of 49.3, which is 7.6 points above their moderately negative Q2 2023 sales index; business leaders in transportation, information, and utilities had a mildly negative sales forecast; and the sales index for retail trade was strongly negative at 37.5 after dropping 8.9 points from last quarter.
  • Industry Profits: In the Q3 2023 survey, forecasts for industry profits were mixed: panelists in four industries are anticipating growth with mild to moderate confidence, two industries expect a continuation of last quarter’s profit levels, and three industries are forecasting decreased profits compared to last Q2 2023 with mild to strong confidence.
  • Industry Hiring: Industry hiring indexes were notably lower this quarter, with five of the nine industries forecasting decreased hiring in Q3 2023. For context, only one industry (finance, insurance, and real estate) had a negative hiring index last quarter. Business leaders in transportation, information, and utilities had the most negative outlook for hiring with an index of 35.7. The other four industries who are forecasting decreased hiring compared to last quarter are only mildly confident in that forecast. Panelists in healthcare and social assistance services had the highest hiring index at a strongly positive 63.5.
  • Industry Capital Expenditures: Five of the industry groups’ forecasts for capital expenditures hovered at or close to the neutral 50, indicating an expectation for a continuation of last quarter’s levels or very mild confidence in their positive and negative forecasts. Two industries had moderately or strongly positive capital spending indexes: wholesale trade and professional, scientific, and technical services. Panelists in retail trade had the lowest index for capital spending at a moderately negative 43.8.


Firm Size: Third Quarter 2023 Outlook

Number of Employees
0 to 19 20 to 99 100+
ABCI 50.3 47.8 51.4
Alabama Economy 53.5 48.8 53.5
US Economy 41.5 35.1 41.5
Industry Sales 55.3 51.6 55.0
Industry Profits 49.6 49.6 52.0
Industry Hiring 50.0 51.6 54.5
Industry Capital Expenditures 51.8 50.0 52.0

Large Firms Forecasting Growth in Q3 2023

  • ABCI by firm size ranged from mildly positive to mildly negative this quarter. Panelists at large firms, those with over 100 or more employees, had a mildly positive Q3 2023 ABCI of 51.4. This is a 4.7-point increase from last quarter when large firms had the lowest ABCI of the three groups. In the Q3 2023 survey, business leaders in large firms expressed higher confidence than their counterparts for three of the four the industry component indexes, with large firms’ expectations for increased hiring being notably higher.
  • Small firms, those with fewer than 20 employees, had a neutral ABCI of 50.3 this quarter, indicating expectations for a continuation of last quarter’s economic conditions. For the third consecutive quarter, panelists at these firms had the highest industry sales index. Small firms had the lowest industry hiring index by firm size at a neutral 50.0.
  • Midsize firms, those with between 20 to 99 employees, had the lowest firm size ABCI at a mildly negative 47.8. Business leaders from these firms had a mildly positive outlook for industry sales and hiring but remain skeptical about other component indexes.
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The Center for Business and Economic Research would like to thank the 183 Alabama business executives who completed the third quarter 2023 ABCI survey. This is the 87th 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 2023.

Analysis provided by Susannah Robichaux, Socioeconomic Analyst, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.