Alabama Business Confidence Index
Alabama Business Confidence Index™
Third Quarter 2026
Download the Full ReportBusiness Confidence Remains Moderately Expansionary in Q3 2026
For the fourth consecutive quarter, \ABCI\ (ABCI) panelists are forecasting overall growth with moderate confidence. The Q3 2026 ABCI decreased 1.0 point to register at 55.6. Many of the Q3 2026 component indexes stayed relatively stable from last quarter, changing by less than a point. Business leaders are still forecasting increased sales and profits and an improved statewide economy with moderate confidence. The capital expenditures index had the largest decrease from last quarter, only dropping 3.2 points to register as mildly expansionary.
Third Quarter 2026 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 Alabama economic outlook remained moderately confident in the Q3 2026 survey, decreasing 0.6 points to reach 57.0. Panelists have consistently forecasted improved statewide economic conditions since Q3 2025.
- US Economy: The Q3 2026 forecasts for the US economy were the most divided, as seen in Statewide Response Breakdown graph below. As a result, the US outlook was the lowest component index for the quarter at a mildly expansionary 52.3.
- Industry Sales: Despite a small decrease from last quarter’s index level, the Q3 2026 sales index remained the highest component index, registering at a strongly confident expansionary 59.7. Over half of the ABCI panelists expect to increase sales in Q3 2026, while only 15 percent anticipate a decrease from last quarter’s sales levels.
- Industry Profits: Alabama business leaders are continuing to forecast profit growth with a moderately confident index of 57.4.
- Industry Hiring: Business leaders are forecasting increased hiring with a mildly confident index of 52.3 in Q3 2026. Over half of panelists expect to continue hiring at the same rate as last quarter.
- Industry Capital Expenditures: The index for capital expenditures was 54.2 in the Q3 2026 ABCI survey. This is a 3.2-point decrease from last quarter and communicates mild confident expectations for increased capital spending this quarter.
Statewide Response Breakdown
Statewide Response BreakdownParticipants’ responses reported as percentages |
| Much Worse | Somewhat Worse | No Change | Somewhat Better | Much Better | |
|---|---|---|---|---|---|
| Alabama Economy | 2.1 | 13.4 | 42.3 | 38.7 | 3.5 |
| US Economy | 5.6 | 25.4 | 26.8 | 38.7 | 3.5 |
| Industry Sales | 1.4 | 13.4 | 33.1 | 49.3 | 2.8 |
| Industry Profits | 1.4 | 17.6 | 32.4 | 47.2 | 1.4 |
| Industry Hiring | 3.5 | 14.1 | 51.4 | 29.6 | 1.4 |
| Industry Capital Expenditures | 3.5 | 14.1 | 46.5 | 33.8 | 2.1 |
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 1.9-percent increase in Alabama GDP for 2026, which is comparable to 2025’s growth rate of 2.0 percent. Alabama employment is expected to only grow by 0.4 percent in 2026, which is just above 2025’s 0.3 percent. CBER anticipates that the state’s total tax receipts will grow by 2.5 percent this year, slightly slower growth than the 2.8-percent increase measured in 2025.
Expansion Forecasted Across Metros
For the third consecutive quarter, the ABCIs from four of Alabama’s five largest metro areas were all expansionary. In the Q3 2026 ABCI survey, panelists in Huntsville are forecasting increased sales and profits with strong confidence, while business leaders in Montgomery are anticipating higher sales and improved statewide economic conditions with strong confidence. Business leaders in Tuscaloosa and Birmingham are more conservative in their expectations, with mostly mildly confident expansionary component indexes mixed with neutral or mildly contractionary outlooks for the US economy and industry hiring.
ABCI by Metro Area
Metropolitan Statistical Area (MSA): Third Quarter 2026 Outlook |
| Statewide | Birmingham–Hoover | Huntsville | Mobile | Montgomery | Tuscaloosa | |
|---|---|---|---|---|---|---|
| ABCI | 55.6 | 52.1 | 56.5 | — | 56.2 | 52.7 |
| Alabama Economy | 57.0 | 50.8 | 57.9 | — | 62.5 | 51.8 |
| US Economy | 52.3 | 49.2 | 47.0 | — | 53.1 | 50.0 |
| Industry Sales | 59.7 | 54.2 | 64.0 | — | 60.9 | 57.1 |
| Industry Profits | 57.4 | 54.2 | 62.2 | — | 54.7 | 53.6 |
| Industry Hiring | 52.8 | 50.8 | 54.9 | — | 54.7 | 50.0 |
| Industry Capital Expenditures | 54.2 | 53.3 | 53.0 | — | 51.6 | 53.6 |
Expansionary Forecasts with Significantly Varied Confidence
All nine industry groups have expansionary industry indexes in the Q3 2026 ABCI, though the level of confidence in those forecasts is notably different across industries. Three industry groups are forecasting growth with strong confidence this quarter, with industry indexes above 60; three industry groups have moderate confidence in their expansionary forecasts (55 to 58); and three are mildly confident they will experience industry growth (52 to 54). Most industry indexes did not change significantly from Q2 2026, increasing or decreasing by fewer than 3 points. Only two industry indexes had notable decreases: wholesale trade and manufacturing. However, both had very strong confidence in Q2 2026 and remain strongly optimistic this quarter despite those decreases.
Industry Component Index: Third Quarter 2026 Outlook |
| Industry Index | Change from Q2 | Sales | Profits | Hiring | Capital Expenditures | |
|---|---|---|---|---|---|---|
| Transportation/Information/Utilities | 61.7 | — | 62.5 | 62.5 | 53.1 | 68.8 |
| Wholesale Trade | 61.0 | -10.9 | 68.8 | 62.5 | 59.4 | 53.1 |
| Manufacturing | 60.5 | -5.2 | 62.5 | 62.5 | 57.8 | 59.4 |
| Healthcare/Social Assistance Services | 57.6 | -1.4 | 66.7 | 58.3 | 52.8 | 52.8 |
| Statewide | 56.0 | -1.6 | 59.7 | 57.4 | 52.8 | 54.2 |
| Finance/Insurance/Real Estate | 55.5 | -2.4 | 58.6 | 59.4 | 50.8 | 53.1 |
| Construction | 55.3 | -2.0 | 57.1 | 57.1 | 60.7 | 46.4 |
| Professional/Scientific/Technical Services | 54.0 | 2.8 | 59.1 | 53.4 | 50.0 | 53.4 |
| Retail Trade | 53.8 | 1.7 | 55.0 | 55.0 | 50.0 | 55.0 |
| All Other Services | 52.7 | -2.4 | 55.0 | 51.7 | 51.7 | 52.5 |
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: Business leaders across all nine industries are expecting to increase sales this quarter. Panelists in wholesale trade (68.8) and healthcare and social assistance services (66.7) had the highest sales indexes, but two other industries also had sales indexes greater than 60, communicating strong confidence in their expansionary forecasts. The remaining five industry groups are anticipating increased sales this quarter with moderate confidence.
- Industry Profits: Expectations for industry profits are also all expansionary but with more subdued confidence than seen in the sales indexes. Panelists in “all other services” had the lowest profits index with a mildly confident expansionary outlook of 51.7, while business leaders in transportation, information, and utilities; wholesale trade; and manufacturing all had the highest indexes (all 62.5), communicating strong confidence in their forecasts for increased industry profits in Q3 2026.
- Industry Hiring: The forecasts for industry hiring were expansionary for seven of the nine categories, with the highest confidence expressed by panelists in construction (60.7). Two industries had neutral hiring indexes (50.0), signaling expectations for a continuation of last quarter’s hiring levels. This was retail trade’s second consecutive neutral hiring index, while the neutral hiring index for professional, scientific, and technical services in Q3 2026 is 3.6 points higher than their mildly confident contractionary index from Q2 2026.
- Industry Capital Expenditures: Industry capital expenditures had the largest spread of the industry indexes from the highest to lowest indexes. Panelists in transportation, information, and utilities are the most confident they will increase their capital spending this quarter with a very strongly expansionary index of 68.8. On the other hand, business leaders in construction are forecasting decreased capital spending compared to last quarter with a mildly confident index of 46.4. The remaining seven industry groups are all anticipating growth in their Q3 2026 capital expenditures with mild to moderate confidence.
Firm Size: Third Quarter 2026 Outlook |
| Number of Employees | |||
|---|---|---|---|
| 0 to 19 | 20 to 99 | 100+ | |
| ABCI | 51.3 | 55.5 | 62.2 |
| Alabama Economy | 52.8 | 57.9 | 62.8 |
| US Economy | 47.2 | 52.0 | 60.4 |
| Industry Sales | 54.4 | 60.5 | 67.1 |
| Industry Profits | 52.8 | 56.6 | 65.2 |
| Industry Hiring | 46.4 | 55.9 | 59.8 |
| Industry Capital Expenditures | 54.4 | 50.0 | 57.9 |
Large Firms Most Confidently Forecasting Growth
- In the Q3 2026 survey, firms of all sizes are anticipating growth compared to last quarter, but the confidence of those forecasts varied significantly. The ABCI for large firms (100 or more employees) grew 4.0 points from last quarter to register at a strongly confident 62.2. In contrast, the ABCIs for mid-size firms (between 20 to 99 employees) and small firms (fewer than 20 employees) both decreased by about 3 points, resulting in moderately and mildly confident ABCIs, respectively.
- Panelists at large firms are more confident than their counterparts across all of the component indexes, with especially strong confidence forecasting increased industry sales and profits and improved conditions in the Alabama economy. Their lowest component index was capital expenditures, which was still moderately confident and expansionary at 57.9.
- Five of the six component indexes for mid-sized firms were expansionary with confidence levels ranging from mild (US economic outlook) to strong (sales). Their only neutral index was capital expenditures. Business leaders in small firms are forecasting growth in capital spending and sales with mild confidence, but they have contractionary outlooks for the US economy and hiring in Q3 2026.
The Center for Business and Economic Research would like to thank the 142 Alabama business executives who completed the third quarter 2026 ABCI survey. This is the 99th 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 2026.
Analysis provided by Susannah Robichaux, Socioeconomic Analyst, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.