Alabama Business Confidence Index

Third Quarter 2019

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Business Confidence Decreases but Remains Positive

Business professionals across Alabama continue to forecast growth leading into the third quarter of 2019 though with more subdued confidence than in Q2 2019. This data comes from the Alabama Business Confidence Indextm (ABCI) survey, which is conducted quarterly by the Center for Business and Economic Research at the University of Alabama’s Culverhouse College of Business. The ABCI registered at a moderately confident 58.5 after decreasing 6.3 points from Q2 2019.

Statewide Component Index Analysis

  • Alabama Economy: Alabama business leaders are forecasting improved statewide economic conditions with moderate confidence this quarter. In the Q3 2019 survey, the Alabama economy index decreased 8.4 points to reach 58.9.
  • US Economy: Confidence in the US economy also remained positive, despite a 5.6-point decrease from the previous quarter, registering at a mildly confident 54.4 in the third quarter survey.
  • Industry Sales: Business leaders throughout the state expect sales to grow with strong confidence in the third quarter with an index of 61.7 after a 6.8-point decrease from Q2 2019.
  • Industry Profits: Despite it being the lowest industry component index, the profits index continues to signal expectations for growth in Q3 2019. The index registered at moderately confident 57.8 after decreasing 7.7 points from the previous quarter.
  • Industry Hiring: With an index of 58.9 after a 4.2-point decrease, Alabama business leaders are still forecasting increased hiring compared to the previous quarter.
  • Industry Capital Expenditures: The statewide index for capital expenditure registered at 59.3 in Q3 2019, communicating moderately confident expectations for increased capital expenditure compared to the previous quarter, despite a 5.0-point decrease in the index.

Statewide Response Breakdown

Statewide Response Breakdown

Participants’ responses reported as percentages

Much Worse Somewhat Worse No Change Somewhat Better Much Better
Alabama Economy 1.5 10.2 43.8 40.1 4.4
US Economy 0.7 17.5 47.7 32.1 2.2
Industry Sales 0.0 16.1 28.5 48.2 7.3
Industry Profits 1.5 16.1 38.0 38.7 5.8
Industry Hiring 0.7 13.1 41.6 38.7 5.8
Industry Capital Expenditures 2.9 8.8 42.3 40.1 5.8

ABCI by Metro Area


CBER’s Forecast for Alabama

The Center for Business and Economic Research forecasts 1.9 percent growth in Alabama GDP for the 2019 fiscal year. This is a decrease from the 2.5 percent growth in 2018, and fits with the more moderate business confidence measured in this survey. Employment is expected to grow 1.5 percent in 2019, and CBER forecasts tax revenues increasing 4.5 percent this fiscal year.

Huntsville Leads MSAs in Business Confidence

Though business confidence decreased throughout the state’s four largest metropolitan statistical areas (MSAs) this quarter, all but Montgomery are continuing to forecast growth in Q3 2019. Huntsville business leaders have the highest expectations for Q3 2019 with an ABCI of 65.6 and very confident industry indexes ranging from 65.5 to 69.6. Mobile’s ABCI registered at a moderately confident 57.3, after confidently forecasting improved statewide economy with an index of 60.4. Business leaders in Birmingham–Hoover expect economic growth this quarter, though with an index of 54.7, indicating milder confidence. The Q3 2019 ABCI for Montgomery is 47.5, indicating a mildly confident forecast for decreased economic activity compared to Q2 2019.


Metropolitan Statistical Area (MSA): Third Quarter 2019 Outlook

Statewide Birmingham-Hoover Huntsvile Mobile Montgomery
ABCI 58.7 54.7 65.6 57.3 47.5
Alabama Economy 58.9 55.2 63.7 60.4 48.3
US Economy 54.4 50.9 58.3 55.2 46.7
Industry Sales 61.7 56.9 69.6 57.3 53.3
Industry Profits 57.8 53.4 65.5 56.2 45.0
Industry Hiring 58.9 56.0 69.0 55.2 46.7
Industry Capital Expenditures 59.3 56.0 67.3 59.4 50.0

Industries Continue to Forecast Growth

Most of the surveyed industries are forecasting growth in the third quarter with moderate to strong confidence. For the second consecutive quarter, panelists in “All Other Services” had the highest industry ABCI at 64.5 after decreasing 7.9 points from Q2 2019. The “All Other Services” category 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. The only industry that did not have a positive ABCI was retail trade with a mildly negative index of 47.2. This is the seventh consecutive quarter that panelists in retail trade have had the lowest industry business confidence.

Industry Component Index: Third Quarter 2019 Outlook

ABCI Change from Q2 Sales Profits Hiring Capital Expenditures
All Other Services 64.5 -7.9 65.7 68.5 68.5 66.7
Professional/Scientific/Technical Services 61.6 0.5 64.5 61.8 61.8 60.5
Transportation/Information/Utilities 59.7 4.1 58.3 58.3 58.3 66.7
Statewide 58.5 -6.3 61.7 57.8 58.9 59.3
Manufacturing 57.1 -11.1 62.0 56.5 58.7 53.3
Healthcare/Social Assistance Services 56.5 0.2 63.9 50.0 58.3 52.8
Construction 56.2 -10.5 58.3 58.3 58.3 60.4
Finance/Insurance/Real Estate 55.7 -9.6 60.4 58.3 50.0 58.3
Wholesale Trade 54.7 -9.7 59.4 56.2 53.1 56.2
Retail Trade 47.2 -7.6 45.8 41.7 50.0 45.8

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Strongly Confident Forecasts for Small and Mid-Sized Businesses

  • Industry Sales: In Q3 2019, business leaders in eight of the nine industries expect increases in sales with moderate to strong confidence with the lowest of these positive indexes registering at 58.3. Only retail trade forecasts decreased sales in Q3 compared to the previous quarter with an index 45.8. Professionals in service industries were particularly confident in their forecasts for increased sales: the sales index for “All Other Services” registered at 65.7; professional, scientific, and technical services at 64.5; and healthcare and social services at a strongly confident 63.9.
  • Industry Profits: Panelists across most industry categories are expecting stronger profits compared to Q2 2019. Again, businesses in “All Other Services” lead in confidence with a strongly confident profit index of 62.0, with professional, scientific, and technical services close behind (61.8). Panelists in retail trade are bracing themselves for decreased profits compared to the previous quarter with a moderately confident negative forecast of 41.7. Healthcare and social services’ profits index registered at a neutral 50.0, indicating expectations for a continuation of Q2 2019’s levels of profits in third quarter of 2019.
  • Industry Hiring: Again, “All Other Services” led in confidence for increased hiring with an index of 68.5, though six of the nine industry categories had hiring indexes above 58.0, indicating a moderate to high confidence in growth. Professionals in retail trade and finance, insurance, and real estate forecast no change in their hiring compared to the previous quarter with neutral indexes of 50.0.
  • Industry Capital Expenditures: The majority of industries also expect to increase their capital spending in Q3 2019. “All Other Services” and transportation, information, and utilities led in confidence with indexes of 66.7, though not all industries shared that high level of confidence in their forecasts: panelists in healthcare and social services, as well as manufacturing, had much milder confidence with indexes of 52.8 and 53.3, respectively. Only retail trade anticipates decreased capital expenditure in Q3 2019 with an index of 45.8.

Firm Size: Third Quarter 2019 Outlook

Number of Employees
0 to 19 20 to 99 100+
ABCI 60.7 60.6 54.7
Alabama Economy 61.7 60.9 54.6
US Economy 56.1 58.3 49.5
Industry Sales 65.3 63.5 56.6
Industry Profits 61.7 57.7 54.1
Industry Hiring 60.2 60.9 56.1
Industry Capital Expenditures 59.2 62.2 57.1


The Center for Business and Economic Research would like to thank the 137 Alabama business executives who completed the third quarter 2019 ABCI survey. This is the 71 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 2019.


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