Alabama Business Confidence Index

Alabama Business Confidence Index™

Second Quarter 2022

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Industry Confidence High Despite Uncertainty for U.S. Economy

Alabama business leaders are slightly less confident heading into the second quarter of 2022 according to the most recent Alabama Business Confidence Index (ABCI) survey. After a dramatic 9.0-point drop in the ABCI from Q4 2021 to Q1 2022, the index decreased another 2.6 points to reach a mildly positive level of 54.6. Business confidence for the component indexes varied, with high expectations for increased industry hiring and sales contrasting with a strongly negative forecast for the U.S. economy. 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.

Second Quarter 2022 Outlook

Statewide Change from Q1
ABCI 54.6 -2.6
Alabama Economy 52.3 -4.5
US Economy 38.5 -8.0
Industry Sales 61.4 -0.9
Industry Profits 55.2 -0.1
Industry Hiring 62.9 0.6
Industry Capital Expenditures 57.5 -2.3


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: Conditions in the Alabama economy are expected to improve from Q1 2022’s levels with a mildly confident index of 52.3. Panelists were divided almost equally in their forecast responses.
  • US Economy: With an index of 38.5 after an 8.0-point decrease from Q1 2022, the U.S. outlook communicates strongly negative expectations for Q2 2022. This is the only component index with a negative outlook for the quarter, as almost 58 percent of panelists forecast worse economic conditions for the current quarter.
  • Industry Sales: The profits index decreased by only 0.9 points from Q1 2022 to register at a strongly positive 61.4 this quarter.
  • Industry Profits: Alabama panelists are continuing to forecast increased industry profits in Q2 2022 with a moderately confident index of 55.2. This is a 0.1-point decrease from the previous quarter’s index.
  • Industry Hiring: Business leaders are still forecasting increased hiring with strong confidence this quarter with an index of 62.9 after an increase of 0.6 points from Q1 2022. This is the third consecutive quarter that hiring has been the highest component index.
  • Industry Capital Expenditures: At 57.5 after a 2.3-point decrease, the industry capital expenditure index still signals moderately strong expectations for increased capital spending in Q2 2022 compared to 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 2.2 28.3 33.2 31.0 5.4
US Economy 10.3 47.3 22.3 18.5 1.6
Industry Sales 1.1 16.8 27.2 45.1 9.8
Industry Profits 3.3 21.7 32.6 35.9 6.5
Industry Hiring 0.5 6.5 40.8 45.1 7.1
Industry Capital Expenditures 3.3 11.4 42.4 38.0 4.9



CBER’s Forecast for Alabama

The Center for Business and Economic Research is forecasting a 2.5-percent increase in Alabama GDP for 2022. This growth rate is 1.6 points below 2021’s 4.1 percent rebound, but is a continuation of the rebound from the 3.2-percent drop in ALGDP in 2020. Employment is expected to increase by 1.5 percent in 2022, and CBER expects total tax receipts to increase by 12.0 percent for FY2022, compared to the 14.4 percent increase seen in FY2021.

Mild and Moderately Positive Outlooks from Metro Panelists in Q2 2022

Overall, confidence throughout Alabama’s metro areas waned but remained positive in Q2 2022 with all of the ABCIs registering over 50. The indexes for industry hiring and sales were fairly high across metros, but negative expectations for the U.S. economy weighed heavily on all of the metros’ ABCIs. Huntsville and Birmingham–Hoover had ABCIs above the state average at moderately confident levels of 58.3 and 56.2, respectively. Mobile’s business leaders are mildly confident with an index of 53.6. Tuscaloosa and Montgomery remained positive but were very close to the neutral index of 50, indicating very mild business confidence compared to Q1 2021.

ABCI by Metro Area

Metropolitan Statistical Area (MSA): Second Quarter 2022 Outlook

Statewide Birmingham–Hoover Huntsville Mobile Montgomery Tuscaloosa
ABCI 54.6 56.2 58.3 53.6 51.3 51.8
Alabama Economy 52.3 54.8 57.1 52.2 48.9 46.5
US Economy 38.5 42.9 39.6 40.2 34.8 35.0
Industry Sales 61.4 59.5 66.5 60.9 55.4 60.5
Industry Profits 55.2 57.1 56.6 48.9 54.3 54.0
Industry Hiring 62.9 63.1 68.9 62.0 62.0 58.5
Industry Capital Expenditures 57.5 59.5 60.8 57.6 52.2 56.0


Confidence by Industry Varies from Strongly Positive to Moderately Negative

In the Q2 2022 survey, there was almost a 20-point spread between the highest and lowest industry ABCIs. Six of the nine industry groups had positive forecasts with confidence ranging from mild to strong, while the remaining three groups had mildly or moderately negative forecasts for the quarter. For the second consecutive quarter, manufacturing had the highest ABCI with a strongly confident 60.5. They were followed closely by wholesale trade, whose ABCI increased by 11.8 points from Q1 2022 to reach 60.4, indicating strong expectations for improved economic conditions compared to the previous quarter. In contrast, panelists in healthcare and social assistance are forecasting a contraction compared to Q1 2022, with a moderately negative index of 42.2 after an 11.6-point decrease from the previous quarter’s mildly positive outlook.

Industry Component Index: Second Quarter 2022 Outlook

ABCI Change from Q1 Sales Profits Hiring Capital Expenditures
Manufacturing 60.5 -0.7 63.2 64.7 72.1 64.7
Wholesale Trade 60.4 11.8 68.8 68.8 65.6 56.2
Construction 58.9 2.1 67.9 53.6 62.5 64.3
Professional/Scientific/Technical Services 55.2 -1.9 62.9 53.8 64.4 53.0
All Other Services 55.0 -3.2 65.8 58.2 62.0 54.9
Finance/Insurance/Real Estate 54.6 -2.5 57.0 53.1 63.3 62.5
Statewide 54.6 -2.6 61.4 55.2 62.9 57.5
Transportation/Information/Utilities 48.8 -10.1 53.6 46.4 46.4 67.9
Retail Trade 47.9 -1.3 56.2 46.9 56.2 50.0
Healthcare/Social Assistance Services 42.2 -11.6 46.7 41.7 60.0 48.3


  • Industry Sales: All but one industry is anticipating increased sales in Q2 2022. Only healthcare and social assistance has a negative forecast for sales in Q2 2022, with a mildly confident index of 46.7. Wholesale trade had the highest confidence in their forecast for increased sales compared to Q1 2022 with a very strong index of 68.8. Panelists in construction, “All Other Services”, and manufacturing also had strongly confident sales indexes above 60. “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 Profits: Expectations for industry profits were more varied than sales. Wholesale trade had the highest profits index at 68.8, followed by manufacturing at 64.7. Four industry groups had positive forecasts with mild to moderate confidence that profits would increase in Q2 2022 compared to the previous quarter. Panelists in healthcare and social assistance were the least optimistic this quarter, anticipating a decrease in their profits with moderate confidence. For the second consecutive quarter, retail trade had a negative profits index, forecasting a contraction in profits compared to Q1 2022 with mild confidence.
  • Industry Hiring: Most industries are expecting to increase hiring this quarter with strong confidence, with the indexes of seven of the nine industry categories registering above 60. This was also the case last quarter, though in this survey, panelists in wholesale trade are anticipating hiring with strong confidence while the hiring index for retail trade was only moderately confident. Panelists in transportation, information, and utilities were the only ones to forecast a decrease in hiring compared to Q1 2022 with a mildly negative index of 46.4.
  • Industry Capital Expenditures: All industries forecasted capital expenditure growth from Q3 2021 to Q1 2022, but this quarter, two industry groups did not have a positive forecast: retail trade and healthcare and social assistance. Retail trade had a neutral index of 50.0, indicating expectations for a continuation of the previous quarter’s levels of capital expenditures. Panelists in healthcare and social assistance had a mildly negative outlook in Q2 2022 with an index of 48.3. Transportation, information, and utilities had the highest capital expenditures index of 67.9, which was significantly higher than the industry’s forecasts for sales, profits, and hiring. The three other industries that are also anticipating growth with strong confidence are manufacturing (64.7); construction (64.3); and finance, information, and utilities (62.5).


Firm Size: Second Quarter 2022 Outlook

Number of Employees
0 to 19 20 to 99 100+
ABCI 53.9 54.2 56.0
Alabama Economy 52.7 52.8 51.3
US Economy 37.0 35.2 43.4
Industry Sales 62.0 58.8 63.2
Industry Profits 53.4 56.5 56.1
Industry Hiring 60.6 64.4 64.5
Industry Capital Expenditures 57.5 57.4 57.5

For Second Consecutive Quarter, Large Firms are Most Confident

  • In the Q2 2022 survey, all sizes of firms expressed expectations for growth compared to Q1 2022 with mild to moderate confidence. Large firms, those with 100 or more employees, had the highest confidence at 56.0. Mid-sized firms, those with 20 to 99 employees, had a Q2 2022 ABCI of 54.2, and small firms, those with up to 19 employees, followed closely with a mildly positive ABCI of 53.9.
  • All categories of firms reported similar levels of confidence for many of the component indexes, but the index with the highest variation was for the U.S. economy. Despite all three firm groupings reporting negative U.S. outlooks, large firms were only moderately confident in their forecast with an index of 43.4, while small and mid-sized firms had strongly negative indexes of 37.0 and 35.2, respectively.
  • Firms of all sizes continue to forecast increased hiring in the coming quarter with strong confidence, though the index for small firms (60.6) was below those of mid-sized (64.4) and large firms (64.5). Mid-size firms are anticipating sales growth with less confidence compared to the strongly confident indexes of their counterparts.
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The Center for Business and Economic Research would like to thank the 184 Alabama business executives who completed the second quarter 2022 ABCI survey. This is the 82nd consecutive quarter this report has been recorded, and it would not have been possible without your participation.

Be sure to log in during the June 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the third quarter of 2022.

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