Alabama Business Confidence Index

Alabama Business Confidence Index™

Fourth Quarter 2021

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Despite Decreased ABCI, Alabama Businesses Remain Opimistic

Business leaders are feeling more conservative in forecasting growth according to the fourth quarter 2021 Alabama Business Confidence Index (ABCI) survey. After Q2 2020, business confidence has been recovering with a steady upward trajectory until this quarter: the ABCI decreased 9.0 points to reach a still moderately confident index of 58.0. This data comes from the ABCI survey, which is conducted quarterly by the Center for Business and Economic Research at the University of Alabama’s Culverhouse College of Business.

Fourth Quarter 2021 Outlook

Statewide Change from Q3
ABCI 58.0 -9.0
Alabama Economy 58.9 -14.3
US Economy 50.7 -15.1
Industry Sales 60.6 -7.5
Industry Profits 56.6 -8.2
Industry Hiring 62.0 -4.4
Industry Capital Expenditures 59.2 -4.3


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: With an index of 58.9 after a 14.3-point decrease from Q3 2021, the Alabama outlook communicates moderately confident expectations for improved economic conditions throughout the state.
  • US Economy: Alabama panelists are feeling least confident about growth in the U.S. economy in Q4 2021. The index registered at a neutral 50.7 after a 15.1-point decrease from the previous quarter.
  • Industry Sales: Business leaders are still feeling very confident forecasting increased sales this quarter compared to Q3 2021 with an index of 60.6 after a decrease of 7.5 points.
  • Industry Profits: The profits index dropped by 8.2 points to register at an moderately confident 56.6 this quarter.
  • Industry Hiring: At 62.0, industry hiring is the highest component index in Q4 2021, signalling strong expectations for increased hiring compared to last quarter.
  • Industry Capital Expenditures: Industry capital expenditures are expected to increase from Q3 2021’s levels, as shown by the strongly confident index of 59.2 after a 4.3-point decrease from the previous quarter.

Statewide Response Breakdown

Statewide Response Breakdown

Participants’ responses reported as percentages

Much Worse Somewhat Worse No Change Somewhat Better Much Better
Alabama Economy 0.6 14.0 40.2 39.7 5.6
US Economy 3.4 26.8 36.3 30.7 2.8
Industry Sales 1.7 12.8 30.7 50.8 3.9
Industry Profits 4.5 14.0 36.9 40.2 4.5
Industry Hiring 0.6 8.4 41.9 40.8 8.4
Industry Capital Expenditures 1.1 10.6 44.7 37.4 6.1



CBER’s Forecast for Alabama

The Center for Business and Economic Research is forecasting a 5.8-percent increase in Alabama GDP for 2021. This recovery comes after a 2.7-percent drop in ALGDP in 2020. Employment is expected to increase by 2.8 percent in 2021, and CBER expects total tax receipts to increase by 10.0 percent for FY2021, compared to the 5.0 percent increase seen in FY2020.

Tuscaloosa Most Confident in Q4 2021

Though business confidence decreased from the third quarter levels across the state’s metro areas, ABCI panelists are still forecasting growth in Q4 2021. The metro’s hiring indexes were all above 57, indicating sustained expectations for increased hiring despite the higher levels of uncertainty that are reflected in the other indexes. Tuscaloosa had the highest index with a strongly confident ABCI of 60.9, followed by Huntsville at a more moderate 58.8, Mobile at 56.6, and Montgomery at 55.9. Birmingham-Hoover had the lowest metro ABCI this quarter at a mildly positive 54.2. Huntsville had the highest component index of all the metros with a strongly confident hiring index of 64.9.

ABCI by Metro Area

Metropolitan Statistical Area (MSA): Fourth Quarter 2021 Outlook

Statewide Birmingham–Hoover Huntsville Mobile Montgomery Tuscaloosa
ABCI 58.0 54.2 58.8 56.6 55.9 60.9
Alabama Economy 58.9 57.6 61.5 52.6 55.7 63.1
US Economy 50.7 46.7 49.5 47.4 50.0 56.2
Industry Sales 60.6 54.3 59.6 57.9 62.5 64.2
Industry Profits 56.6 51.1 59.6 59.2 53.4 54.5
Industry Hiring 62.0 57.6 64.9 61.8 59.1 63.1
Industry Capital Expenditures 59.2 57.6 57.7 60.5 54.5 64.2


Confidence Varied by Industry Categories

Overall, business confidence decreased in Q4 compared to Q3 2021 but remained positive. Eight of the nine industry groups remain positive in their outlook for the quarter, with confidence ranging from mild (wholesale trade, 53.3) to very confident (construction, 63.5). Only retail trade had a negative ABCI, forecasting a contraction this quarter with a mildly confident index of 45.8. Last quarter, all of the industry ABCIs were positive, with most groupings forecasting growth with strongly confident indexes over 60. This quarter, all of the industry ABCIs decreased from their Q3 2020 levels, with some only dropping 1.9 points (finance, insurance, and real estate) while others decreased by more than 17 points (wholesale trade).

Industry Component Index: Fourth Quarter 2021 Outlook

ABCI Change from Q3 Sales Profits Hiring Capital Expenditures
Construction 63.5 -5.1 66.7 70.8 64.6 62.5
Finance/Insurance/Real Estate 62.2 -1.9 63.6 59.8 64.4 64.4
Manufacturing 60.9 -5.4 64.1 56.2 67.2 62.5
Transportation/Information/Utilities 60.1 -14.4 64.3 67.9 60.7 60.7
Statewide 58.0 -9.0 60.6 56.6 62.0 59.2
Healthcare/Social Assistance Services 57.6 -12.1 62.5 62.5 60.4 54.2
Professional/Scientific/Technical Services 56.8 -7.7 57.1 54.3 63.6 55.7
All Other Services 55.9 -13.1 58.1 51.7 60.5 57.0
Wholesale Trade 53.3 -17.5 65.0 50.0 60.0 60.0
Retail Trade 45.8 -13.1 52.8 41.7 50.0 58.3


  • Industry Sales: In the Q4 2021 survey, business leaders in all of industry categories forecast increased sales compared to the previous quarter, though with varying levels of confidence. This is the third consecitive quarter that all of the indexes have been positive, indicating sustained expectations for sales growth as the economy rebounds from the drop in 2020. Panelists in construction had the highest sales indexes this quarter, registering at an extremely confident 66.7. Five other industries also expect sales growth with strong confidence with indexes ranging from 62.5 for healthcare and social assistance to 65.0 for wholesale trade. Retail trade had the lowest sales index at a mildly positive 52.8.
  • Industry Profits: Five of the nine industry categories are feeling moderately to strongly confident about their profits increasing in Q4 2021 with indexes registering above 56. Construction and transportation, information, and utilities had the highest profits index this quarter at 70.8 and 67.9, indicating extremely strong confidence in increased profits compared to Q3 2021. Panelists in professional, scientific and technical services, as well as in “All Other Services” expect profits to increase but with mild confidence. “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. Wholesale trade had a neutral index of 50.0, indicating expectations for a continuation of last quarter’s profits. Only retail trade had a negative outlook, forecasting a contraction in profits compared to Q3 2021 with a moderately confident index of 41.7.
  • Industry Hiring: Panelists across the strong majority of industries are feeling confident in their forecasts for increased hiring in Q4 2021 compared to the previous quarter. Eight of the nine industry hiring indexes registered above 60.0, communicating strong confidence in forecasts for higher levels of hiring in the coming quarter. Panlelists in retail trade were the exception, forecasting a continuation of Q3 2021’s hiring levels with a netural index of 50.0.
  • Industry Capital Expenditures: For the second consecutive quarter, all of the industry categories expect capital expenditures to increase compared to the previous quarter. Business leaders in all of the nine industry categories are forecasting increased capital expenditures with mild to strong confidence compared to the previous quarter with indexes above 54. Finance, insurance, and real estate had the highest Q4 2021 capital expenditures index at 64.4 after a 4.6-point increase from the industry’s Q3 2021 index. Four other industry categories also forecast increased capital expenditures with strongly confident indexes at or above 60.0. Healthcare and social assistance had the lowest industry capital expenditures index at 54.2, communicating mild confidence for increased capital expenditures compared to the previous quarter.


Firm Size: Fourth Quarter 2021 Outlook

Number of Employees
0 to 19 20 to 99 100+
ABCI 57.1 57.6 59.5
Alabama Economy 56.3 60.4 61.2
US Economy 48.0 50.0 54.9
Industry Sales 60.0 57.8 63.8
Industry Profits 56.3 56.8 56.7
Industry Hiring 61.3 64.1 61.2
Industry Capital Expenditures 60.7 56.8 59.4

No Major Differences in Confidence by Firm Size In Fourth Quarter

  • In the Q4 2021 survey, business confidence did not vary much by size. All three groupings by firm size anticipate growth this quarter with moderate confidence, as shown by their ABCIs ranging from 57.1 to 59.5. Large firms, those with 100 or more employees, had the highest firm size ABCI of 59.5, with especially strong confidence in their forecasts for increased sales and hiring, with indexes of 63.8 and 61.2, as well as for improved statewide economic conditions with an index of 61.2.
  • The ABCI for mid-sized firms, those with 20 to 99 employees, registered at 57.6 this quarter. For the second consecutive quarter, these panelists are expecting to increase hiring with stronger confidence than their large and small counterparts, with a very confident index of 64.1. However, mid-sized firms are feeling less confident in their forecasts for growth in industry sales and capital expenditures, with lower indexes than small and large firms.
  • Small firms, those with fewer than 20 employees, had a moderately positive ABCI of 57.1 this quarter. Panelists in these firms forecast worse economic conditions for the U.S. with a mildly negative index of 48.0. That being said, small firms are feeling optimistic about industry growth, with confidence in growth ranging from a moderately confident 56.3 for profits to strongly confident indexes registering at or above 60 for industry sales, capital expenditures, and hiring.
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The Center for Business and Economic Research would like to thank the 179 Alabama business executives who completed the fourth quarter 2021 ABCI survey. This is the 80th 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 2022.

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