Alabama Business Confidence Index
Alabama Business Confidence Index™
Third Quarter 2024
Download the Full ReportOverall Forecast Remains Mildly Expansionary
The Alabama Business Confidence Index (ABCI) decreased by 2.0 points to register at 52.1 in the Q3 2024 survey, as panelists remain mildly confident in forecasting economic expansion compared to the previous quarter. Though two-thirds of the component indexes decreased compared to their Q2 2024 levels, five of the six remain mildly to moderately expansionary. Despite these sustained positive expectations, Alabama business leaders remain skeptical of the US economic outlook, which remained contractionary for the eleventh consecutive quarter.
Third Quarter 2024 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: Although the index decreased 1.9 points from last quarter’s index, conditions in the Alabama economy are forecasted to improve in Q3 2024 with a mildly expansionary index of 52.0.
- US Economy: The Q3 2024 US economy index registered at a moderately contractionary 42.5 after decreasing 4.2 points. Panelists have been forecasting worse economic conditions for the national economy with mild to very strong confidence since Q1 2022.
- Industry Sales: Expectations for industry sales remain expansionary with a moderately confident index of 56.8, despite a 4.2 point decrease from last quarter. For the second consecutive quarter, this is the survey’s highest component index.
- Industry Profits: Business leaders are still forecasting increased profits compared to last quarter with a mildly confident index of 51.8. Nonetheless, this is 4.1 points below the Q2 2024 profits index.
- Industry Hiring: The hiring index remained mildly expansionary at 54.4 after gaining 0.4 points from last quarter. Just over 30 percent of panelists expect to increase their hiring in Q3 2024 compared to the previous quarter’s levels.
- Industry Capital Expenditures: The Q3 2024 forecast for industry capital expenditures grew by 2.0 points to register at a moderately expansionary index of 54.0.
Statewide Response Breakdown
Statewide Response BreakdownParticipants’ responses reported as percentages |
| Much Worse | Somewhat Worse | No Change | Somewhat Better | Much Better | |
|---|---|---|---|---|---|
| Alabama Economy | 0.0 | 21.3 | 49.7 | 28.4 | 0.5 |
| US Economy | 6.0 | 34.4 | 44.8 | 13.1 | 1.6 |
| Industry Sales | 2.2 | 12.6 | 42.6 | 41.0 | 1.6 |
| Industry Profits | 3.3 | 17.5 | 50.3 | 26.8 | 2.2 |
| Industry Hiring | 1.1 | 12.6 | 55.7 | 29.0 | 1.6 |
| Industry Capital Expenditures | 0.5 | 14.8 | 50.8 | 32.2 | 1.6 |
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 still forecasting a 2.0-percent increase in Alabama GDP for 2024, which is only slightly below the forecasted 2.5-percent growth in 2023. Alabama employment in 2024 is expected to grow by the same amount as in 2023, steadily increasing by 1.8 percent per year. CBER anticipates that the state’s total tax receipts will grow by 2.1 percent this year, which is below the 3.2-percent increase seen in 2023.
Mildly Expansionary or Neutral Outlook for Alabama’s Largest Metros
Business confidence remained mildly expansionary across Alabama this quarter. Birmingham-Hoover and Huntsville had the highest metro ABCIs this quarter at a mildly confident 53.3. Panelists in Birmingham-Hoover had the highest confidence forecasting profit growth of any metro this quarter, while Huntsville business leaders are expecting hiring growth with more confidence than their peers. Tuscaloosa had a very mildly confident Q3 2024 ABCI of 51.1, and Montgomery had a neutral index of 50 this quarter, indicating expectations for a continuation of last quarter’s overall conditions.
ABCI by Metro Area
Metropolitan Statistical Area (MSA): Third Quarter 2024 Outlook |
| Statewide | Birmingham–Hoover | Huntsville | Mobile | Montgomery | Tuscaloosa | |
|---|---|---|---|---|---|---|
| ABCI | 52.1 | 53.3 | 53.3 | — | 50.0 | 51.1 |
| Alabama Economy | 52.0 | 52.1 | 52.1 | — | 50.0 | 52.4 |
| US Economy | 42.5 | 43.6 | 41.7 | — | 41.7 | 41.1 |
| Industry Sales | 56.8 | 57.1 | 58.3 | — | 56.9 | 58.9 |
| Industry Profits | 51.8 | 56.4 | 52.4 | — | 50.0 | 50.0 |
| Industry Hiring | 54.4 | 55.7 | 58.3 | — | 50.0 | 51.6 |
| Industry Capital Expenditures | 54.9 | 55.0 | 56.9 | — | 51.4 | 52.4 |
Forecasts Vary by Industry in Q3 2024 ABCI Survey
In Q3 2024, business confidence by industry ranged from moderately negative to very strongly positive, with six of the nine industry groups forecasting growth with mild to very strong confidence. The industry index only includes panelists’ forecasts for their own industry sales, profits, hiring, and capital expenditures, thus offering unique insight into panelists’ expectations for their specific industries. Panelists in transportation, information, and utilities had the highest industry index as well as the highest increase from last quarter, with their industry index growing from a moderately confident 55.5 in Q2 2024 to a very strongly confident 65.3 in Q3 2024. The industry indexes for construction and manufacturing decreased by less than one point each, indicating sustained moderately confident expansionary forecasts. Wholesale trade had the largest decrease in their industry index, dropping 8.5 points from last quarter to reach a mildly contractionary 46.9. Retail trade had the lowest industry index at 43.8 with contractionary forecasts for all of the 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 2024 Outlook |
| Industry Index | Change from Q2 | Sales | Profits | Hiring | Capital Expenditures | |
|---|---|---|---|---|---|---|
| Transportation/Information/Utilities | 65.3 | 9.8 | 63.9 | 63.9 | 61.1 | 72.2 |
| Construction | 59.9 | -0.7 | 66.7 | 54.2 | 62.5 | 56.2 |
| Manufacturing | 56.3 | -0.3 | 54.8 | 53.6 | 56.0 | 60.7 |
| All Other Services | 55.6 | -5.8 | 59.8 | 51.8 | 53.0 | 57.9 |
| Statewide | 54.5 | -1.5 | 56.8 | 51.8 | 54.4 | 54.9 |
| Professional/Scientific/Technical Services | 53.7 | 3.5 | 54.9 | 52.1 | 55.6 | 52.1 |
| Finance/Insurance/Real Estate | 53.4 | -2.7 | 56.4 | 51.4 | 52.1 | 53.6 |
| Healthcare/Social Assistance Services | 49.4 | -4.6 | 52.3 | 50.0 | 54.5 | 40.9 |
| Wholesale Trade | 46.9 | -8.5 | 50.0 | 41.7 | 50.0 | 45.8 |
| Retail Trade | 43.8 | 1.8 | 46.9 | 37.5 | 43.8 | 46.9 |
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: Forecasts for industry sales were mostly expansionary, with seven of the nine industry groups forecasting growth with mild to very strong confidence. Construction panelists had the highest confidence in their forecast for increased sales this quarter compared to Q2 2024 with a very strongly confident index of 66.7. Wholesale trade had a neutral forecast for sales (50.0), indicating expectations for a continuation of last quarter’s levels, and business leaders in retail trade are forecasting a decrease in sales this quarter with mild confidence (46.9).
- Industry Profits: In the Q3 2024 survey, five of the nine industry groups are expecting profits to increase from last quarter’s levels with mild confidence. The profits index for transportation, information, and utilities was more confident at 63.9. Business leaders in healthcare and social assistance services had a neutral profits index, and whole and resale trade had moderately and strongly contractionary profits indexes of 41.7 and 37.5, respectively.
- Industry Hiring: Forecasts for hiring were similar to those of sales: seven of the nine industries are anticipating an increase in hiring with confidence ranging from mild to strong. Construction had the highest hiring index at 62.5, followed closely by transportation, information, and utilities at 61.1. Panelists in wholesale trade expect to continue hiring at last quarter’s levels with a neutral index, while their counterparts in retail trade expect to decrease hiring in Q3 2023 with a moderately confident index of 43.8.
- Industry Capital Expenditures: Like last quarter, the forecasts for capital expenditures have the highest spread of all the component indexes: the transportation, information, and utilities outlook is very strongly expansionary (72.2) while the forecast from healthcare and social assistance services was moderately contractionary (40.9). Six of the nine of the industries are expecting to increase their capital spending this quarter, while three are anticipating a decrease compared to last quarter’s levels.
Firm Size: Third Quarter 2024 Outlook |
| Number of Employees | |||
|---|---|---|---|
| 0 to 19 | 20 to 99 | 100+ | |
| ABCI | 52.1 | 48.9 | 55.2 |
| Alabama Economy | 51.4 | 47.3 | 57.7 |
| US Economy | 44.2 | 37.3 | 45.5 |
| Industry Sales | 57.2 | 54.1 | 59.1 |
| Industry Profits | 51.4 | 50.5 | 53.6 |
| Industry Hiring | 53.1 | 55.5 | 55.0 |
| Industry Capital Expenditures | 55.1 | 49.1 | 60.5 |
Large Firms Forecast Expansion with More Confidence than Counterparts
- The ABCI for the three groupings by firm size varied notably in the Q3 2024 survey, with large firms forecasting growth in Q3 2024 while mid-sized firms anticipate an overall contraction compared to the previous quarter. Panelists in large firms, those with 100 or more employees, had a moderately expansionary ABCI of 55.2 this quarter after increasing 1.0 points from last quarter. Business leaders at large firms continue to have the highest Alabama economic outlook and are more confident than their peers in forecasting increased sales and capital expenditures this quarter.
- The ABCI for small firms, those with fewer than 20 employees, decreased 3.3 points to reach a mildly expansionary 52.1 in Q3 2024. These business leaders expect sales to increase this quarter with moderate confidence and have mildly expansionary outlooks for all of the remaining component indexes but the US economy.
- For the fifth consecutive quarter, mid-sized firms, those with between 20 to 99 employees, had a lower ABCI than their counterparts. Like their counterparts, these business leaders expect to increase hiring this quarter with moderate confidence, but they have contractionary expectations for the Alabama economy and capital expenditures unlike the other groups.
The Center for Business and Economic Research would like to thank the 183 Alabama business executives who completed the third quarter 2024 ABCI survey. This is the 91st 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 2024.
Analysis provided by Susannah Robichaux, Socioeconomic Analyst, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.