Alabama Business Confidence Index

Alabama Business Confidence Index™

Fourth Quarter 2022

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Forecast Remains Slightly Negative

Alabama business leaders continued to have a negative outlook for the fourth quarter of 2022 according to the most recent Alabama Business Confidence Index (ABCI) survey. The ABCI increased 1.1 points from Q3 2022’s index of 47.3, thereby remaining mildly negative for a second quarter. Before these two quarters, the last time the ABCI was negative was in Q2 2013. Movement of the component indexes was varied– the economic outlooks improved but remained negative, while the industry indexes either remained the same (changed by less than 0.5 point) or decreased slightly but remained positive.

Fourth Quarter 2022 Outlook

Statewide Change from Q3
ABCI 48.4 1.1
Alabama Economy 46.3 5.2
US Economy 34.6 5.3
Industry Sales 52.4 -2.6
Industry Profits 48.8 -0.2
Industry Hiring 55.6 -1.0
Industry Capital Expenditures 52.4 -0.5


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 index for the Alabama economy registered at 46.3 in the Q4 2022 survey, indicating business leaders’ mild confidence in a negative forecast.
  • US Economy: With an index of 34.6 after a 5.3-point increase from Q3 2022, the US outlook still communicates very strongly negative expectations for Q4 2022.
  • Industry Sales: Alabama panelists continue to forecast increased sales this quarter with a mildly positive index of 52.4, though the index decreased 2.6 points from Q3 2022.
  • Industry Profits: Industry profits are expected to decrease this quarter with a mildly negative index of 48.8.
  • Industry Hiring: Despite decreasing by 1.0 points, the Q4 2022 hiring index registered at a moderately confident 55.6, indicating continued expectations for increased hiring compared to the previous quarter.
  • Industry Capital Expenditures: With an index of 52.4, business leaders are still expecting to increase capital expenditures with mild confidence in Q4 2022.

Statewide Response Breakdown

Statewide Response Breakdown

Participants’ responses reported as percentages

Much Worse Somewhat Worse No Change Somewhat Better Much Better
Alabama Economy 2.1 35.0 39.9 21.7 1.4
US Economy 12.6 49.0 26.6 11.2 0.7
Industry Sales 2.8 25.9 36.4 28.7 6.3
Industry Profits 5.6 29.4 34.3 25.9 4.9
Industry Hiring 3.5 9.1 53.1 30.1 4.2
Industry Capital Expenditures 4.9 20.3 40.6 28.7 5.6



CBER’s Forecast for Alabama

The Center for Business and Economic Research is forecasting a 0.8-percent increase in Alabama GDP for 2022, which is well below the 4.1 percent rebound the state saw in 2021. Alabama employment is expected to increase by 1.8 percent in 2022, and CBER anticipates that total tax receipts will grow by 15.2 percent in FY2022.

Metro Confidence Varied

Business leaders in Birmingham–Hoover, Huntsville, and Tuscaloosa have markedly different expectations for Q4 2022. The Tuscaloosa ABCI grew 9.2 points this quarter to reach a mildly confident 54.0, buoyed by moderate and strong forecasts for growth in industry sales, hiring, and capital expenditures. Panelists in Huntsville remained neutral in their forecasts, with a fairly positive outlook for industry offset by their strongly negative expectations for the US economy. Of the three reporting metros, Birmingham–Hoover had the lowest ABCI at a strongly negative 37.9, with all of their component indexes registering below 50. Unfortunately, there was not enough participation from Mobile or Montgomery to calculate valid metro ABCIs, however their survey responses are included in the statewide ABCI summary.

ABCI by Metro Area

Metropolitan Statistical Area (MSA): Fourth Quarter 2022 Outlook

Statewide Birmingham–Hoover Huntsville Tuscaloosa
ABCI 48.4 37.9 50.7 54.0
Alabama Economy 46.3 36.4 45.8 52.5
US Economy 34.6 25.0 33.3 42.5
Industry Sales 52.4 43.2 56.8 58.1
Industry Profits 48.8 39.8 54.2 53.8
Industry Hiring 55.6 45.5 57.3 60.0
Industry Capital Expenditures 52.4 37.5 56.8 56.9


Industry Categories Split between Positive, Neutral, and Negative Forecasts

In the fourth quarter 2022 survey, only two industries had a positive outlook: “All Other Services” (56.3) and transportation, information, and utilities (51.2). “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. Despite their negative ABCIs, many industries are still expecting their industry sales, profits, hiring, and capital expenditures to increase in the coming quarter compared to Q3 2022. Because their lower composite index can be attributed to the negative outlooks for the US and Alabama economies, when only looking at the industry component indexes, two industries, healthcare and social assistance and retail trade, also have a positive outlook for Q4 2022. Of the remaining five industries, two had neutral industry indexes around 50: professional, scientific, and technical services as well as finance, insurance, and real estate. The three industry categories that have a negative view for their industry component indexes are manufacturing, construction, and wholesale trade.

Industry Component Index: Fourth Quarter 2022 Outlook

ABCI Change from Q3 Sales Profits Hiring Capital Expenditures
All Other Services 56.3 8.2 62.8 56.8 60.8 60.1
Transportation/Information/Utilities 51.2 4.0 57.1 50.0 50.0 67.9
Healthcare/Social Assistance Services 50.6 11.5 57.7 51.9 63.5 48.1
Retail Trade 49.2 3.9 50.0 50.0 55.0 60.0
Statewide 48.4 1.1 52.4 48.8 55.6 52.4
Finance/Insurance/Real Estate 47.4 3.3 43.5 50.0 53.7 52.8
Professional/Scientific/Technical Services 45.3 -4.6 52.3 45.5 58.0 46.6
Manufacturing 43.2 -11.0 44.6 41.1 50.0 51.8
Construction 42.1 -4.7 47.2 41.7 50.0 44.4
Wholesale Trade 29.2 -18.0 41.7 25.0 37.5 25.0


  • Industry Sales: Four of the nine of the industry groups are expecting increased sales this quarter with indexes ranging from a mildly confident 52.3 for professional, scientific, and technical services to a strongly confident 62.8 for “All Other Services”. The sales index for healthcare and social assistance services was moderately confident this quarter at 57.7, a strong rebound from the previous two quarters of negative forecasts. Panelists in four industry groups are forecasting a decrease in their sales this quarter with mild to moderate confidence.
  • Industry Profits: Only two industries are forecasting growth in profits this quarter compared to Q3 2022: “All Other Services” and healthcare and social assistance services. Three industries had neutral profits indexes, indicating expectations for a continuation of last quarter’s levels. The remaining four industry groupings have a negative outlook for their Q4 2022 profits. Panelists in wholesale trade are the most pessimistic in their forecast with a very strongly negative profits index of 25.
  • Industry Hiring: Over half of industries expect to increase hiring in the coming quarter compared to Q3 2022. Three industry groups expect to continue hiring at the same rate as last quarter with neutral indexes of 50. Only panelists in wholesale trade expect to decrease hiring this quarter, which is a strong departure from their strongly positive forecast for Q3 2022. Panelists in healthcare and social assistance services had the highest hiring index at 63.5, followed closely by “All Other Services”.
  • Industry Capital Expenditures: Forecasts for capital expenditures varied significantly by industry. Five of the nine industry groups expect to increase their capital spending in Q4 2022 with confidence ranging from mild (manufacturing: 51.8) to very strong (transportation, information, and utilities: 67.9). Four industry groups anticipate a decrease in capital expenditure compared to Q3 2022 with negative indexes as mild as 48.1 for healthcare and social assistance services to as very strong as 25.0 for wholesale trade.


Firm Size: Fourth Quarter 2022 Outlook

Number of Employees
0 to 19 20 to 99 100+
ABCI 49.3 45.5 49.4
Alabama Economy 49.2 41.4 46.1
US Economy 34.9 33.6 35.0
Industry Sales 53.2 47.1 55.6
Industry Profits 47.2 47.1 52.2
Industry Hiring 54.8 57.1 55.6
Industry Capital Expenditures 56.3 46.4 51.7

Slightly Negative Outlook for All Firm Sizes

  • In the Q4 2022 survey, the ABCIs for all three groupings of firms fell into the mildly negative category. Large firms, those with 100 or more employees, and small firms, those with up to 19 employees, were very mild in their negative forecasts with indexes very close to the neutral 50; while mid-sized firms, those with 20 to 99 employees, had slightly more confidence in their negative forecast at 45.5. This is the second consecutive quarter that the ABCI for mid-size firms has been below its counterparts’ indexes.
  • Business leaders of all sized firms are still strongly negative in their forecasts for the US economy and moderately positive in their expectations for increased hiring compared to Q3 2022. The industry component indexes for large firms were all positive this quarter and ranged from mild to moderate confidence in their favorable outlooks.
  • Small firms were more confident in forecasting increased capital expenditures in Q4 2022, with an index much higher than the large or mid-sized firms. However, they did have a mildly negative forecast for industry profits. Panelists in mid-sized firms are anticipating decreased sales, profits, and capital expenditures compared to the previous quarter with mildly negative indexes.
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The Center for Business and Economic Research would like to thank the 143 Alabama business executives who completed the fourth quarter 2022 ABCI survey. This is the 84th 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 2023.

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