Alabama Business Confidence Index

Fourth Quarter 2019

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Continued Business Confidence Heading into Q4 2019

Business confidence remained high throughout Alabama moving into the fourth quarter of 2019, gaining 0.8 points to register at 59.3. This data comes from the Alabama Business Confidence Index (ABCI) survey, which is conducted quarterly by the Center for Business and Economic Research at the University of Alabama’s Culverhouse College of Business. All of the component indexes remained moderately to strongly positive, signaling Alabama business leaders’ continued expectations for economic growth in Q4 2019.

Statewide Component Index Analysis

  • Alabama Economy: Alabama business leaders are forecasting improved statewide economic conditions with strong confidence this quarter. The Alabama economy index increased 1.6 points to reach 60.5 in the Q4 2019 survey.
  • US Economy: Confidence in the US economy was milder but also positive after the index increased 0.5 points to register at 54.9 in the fourth quarter survey.
  • Industry Sales: The sales index continues to signal strong expectations for growth in Q4 2019, registering at 62.3 after increasing 0.6 points from the Q3 2019 survey.
  • Industry Profits: With an index of 58.9 after a 1.1-point increase, Alabama business leaders are still confidently forecasting increased profits compared to the previous quarter.
  • Industry Hiring: The statewide index for hiring increased 1.1. points to register at 60.0 in Q4 2019, communicating moderately strong confidence in increased hiring compared to the previous quarter.
  • Industry Capital Expenditures: Business leaders throughout the state expect capital expenditure to continue growing with moderately strong confidence in the fourth quarter with an index of 59.1 after a 0.2-point decrease from Q3 2019.

Statewide Response Breakdown

Statewide Response Breakdown

Participants’ responses reported as percentages

Much Worse Somewhat Worse No Change Somewhat Better Much Better
Alabama Economy 0.7 13.8 29.7 47.1 8.7
US Economy 1.4 16.7 36.2 36.2 9.4
Industry Sales 1.4 9.4 42.0 42.0 5.1
Industry Profits 2.9 9.4 42.0 39.9 5.8
Industry Hiring 0.0 9.4 42.0 45.7 2.9
Industry Capital Expenditures 0.7 21.7 21.7 35.5 3.6

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 5.6 percent this fiscal year.

Huntsville Remains Most Confident MSA

Business confidence has somewhat stabilized throughout the state’s four largest metropolitan statistical areas (MSAs) this quarter after more dramatic swings in the beginning of 2019. Like last quarter, Montgomery is the only metro area that communicated negative business confidence with a mildly negative ABCI of 48.5. Huntsville business leaders continue to lead in confidence with a very strong Q4 2019 ABCI of 65.3. Mobile’s business community is also very confident moving into this quarter with an ABCI of 62.1. Panelists in Birmingham-Hoover are feeling moderately confident in forecasting improved economic conditions with an ABCI of 54.6.


Metropolitan Statistical Area (MSA): Fourth Quarter 2019 Outlook

Statewide Birmingham-Hoover Huntsvile Mobile Montgomery
ABCI 59.3 54.6 65.3 62.1 48.5
Alabama Economy 60.5 55.1 67.3 58.8 52.3
US Economy 54.9 51.9 56.5 57.5 43.2
Industry Sales 62.3 56.4 68.5 67.5 54.5
Industry Profits 58.9 52.6 66.7 65.0 45.5
Industry Hiring 60.0 53.2 68.5 68.8 50.0
Industry Capital Expenditures 59.1 58.3 64.3 55.0 45.5

Industries Continue to Forecast Growth

Industries are divided in their levels of confidence heading into Q4 2019, but all industries except wholesale trade forecast growth compared to the previous quarter. Panelists in “All Other Services” continue to have the highest industry ABCI after increasing 1.7 points to reach 66.2 this quarter. 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 wholesale trade with a mildly negative index of 49.5. This is very close to the neutral 50.0, so panelists in wholesale trade are likely expecting a continuation of the third quarter’s conditions.

Industry Component Index: Fourth Quarter 2019 Outlook

ABCI Change from Q2 Sales Profits Hiring Capital Expenditures
All Other Services 66.2 1.7 71.6 67.2 68.1 64.7
Professional/Scientific/Technical Services 62.3 0.7 67.0 61.0 66.0 59.0
Transportation/Information/Utilities 54.6 -5.1 55.6 55.6 52.8 58.3
Statewide 59.3 0.8 62.3 58.9 60.0 59.1
Manufacturing 52.1 -5.0 54.5 48.9 51.1 53.4
Healthcare/Social Assistance Services 59.9 3.4 65.6 65.6 62.5 50.0
Construction 63.5 7.3 62.5 65.6 65.6 71.9
Finance/Insurance/Real Estate 58.5 2.8 59.1 58.0 56.8 59.1
Wholesale Trade 49.5 -5.2 50.0 44.4 44.4 55.6
Retail Trade 52.1 4.9 62.5 56.2 62.5 43.8

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Strongly Confident Forecasts for Small and Mid-Sized Businesses

  • Industry Sales: In Q4 2019, no industries expect a decrease in sales compared to the previous quarter. Professionals in wholesale trade forecast a continuation of Q3 2019’s levels of sales with a neutral index of 50.0, but all other industries expressed mild to strong confidence in growth. Professionals in “All Other Services” were especially confident with a very high sales index of 71.6, and on the lower end of the positive spectrum, manufacturing had a sales index of 54.5.
  • Industry Profits: Like sales, “All Other Services” led in confidence for increased profits with an index of 67.2, followed closely by construction (65.6) and healthcare and social assistance services (65.6). All but two industries expressed moderate to strong confidence with profit indexes at or above 55.6. Professionals in wholesale trade forecast a decrease in profits with moderate confidence (44.4), and those in manufacturing anticipate contracted profits with mild confidence (48.9).
  • Industry Hiring: Panelists across most industry categories are expecting increased hiring compared to Q3 2019. Though there were varying levels of confidence, all industries except wholesale trade forecast hiring growth this quarter. Panelists in five of the nine industry categories communicated strong confidence with indexes above 60.0, with “All Other Services” leading with a hiring index of 68.1.
  • Industry Capital Expenditures: Forecasts for increased capital expenditures remained positive for the various industries, but confidence was more moderate with five of the nine industries’ indexes registering between 53.4 and 59.1. Business leaders in construction have strong confidence in increasing capital expenditure compared to Q3 2019 with an index of 71.9. Only retail trade had a negative index of 43.8, conveying moderate confidence in decreased levels of capital spending this quarter.

Firm Size: Fourth Quarter 2019 Outlook

Number of Employees
0 to 19 20 to 99 100+
ABCI 63.2 58.7 54.9
Alabama Economy 63.2 59.6 58.0
US Economy 59.2 55.1 49.5
Industry Sales 65.4 61.0 59.6
Industry Profits 64.0 55.9 54.8
Industry Hiring 64.9 62.5 52.1
Industry Capital Expenditures 62.7 58.1 55.3

Small Businesses Lead in Confidence

  • For the second consecutive quarter, small firms, those with fewer than 20 employees, had the most optimistic forecast for growth in the third quarter with an index of 63.2. Five of the six component indexes for small firms registered over 62, conveying strong confidence in growth compared to Q3 2019. The lowest index was for the U.S. economy at 59.2, which still indicates moderately strong confidence in improved conditions in the fourth quarter.
  • Mid-sized firms, those with 20 to 99 employees, expressed moderate confidence in growth this quarter with an ABCI of 58.7. Mid-sized firms are feeling most confident about growth in industry hiring and sales as they prepare for Q4 2019, with indexes of 62.5 and 61.0, respectively. Panelists in these firms are the least confident in their forecasts for improved U.S. economic conditions (55.1) and industry profits (55.9), though those indexes are still decidedly positive.
  • Large firms, those with 100 or more employees, are milder in their confidence when forecasting growth in Q4 2019. While panelists in these firms are moderately confident in increased sales (59.6) and improved statewide economic conditions in Q4 2019, they are more conservative in their forecasts for industry hiring (52.1) and the U.S. economy (49.5).


The Center for Business and Economic Research would like to thank the 138 Alabama business executives who completed the fourth quarter 2019 ABCI survey. This is the 72nd 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 2020.

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