Montgomery Metro Area Report

Alabama Business Confidence Index™

First Quarter 2025

Expansionary Q1 2024 Forecast from Montgomery Panelists

Montgomery business leaders are anticipating growth in Q1 2025 with a strongly optimistic ABCI of 63.3. This is the highest ABCI that the metro has had since Q3 2021, signaling very strong confidence in an expansionary forecast compared to Q4 2024’s levels of economic activity. Business confidence is much higher across all six component indexes than it has been in the past few years, with notably strong confidence in their forecasts for growth in the Alabama and US economies compared to last quarter’s levels.

Index above 50 indicates positive outlook as compared to last quarter.
Index below 50 indicates negative outlook compared to last quarter.

Montgomery Component Index Analysis

• Alabama Economy: Two-thirds of Montgomery business leaders are forecasting improved conditions in the statewide economy compared to the previous quarter, resulting in a strongly confident expansionary index of 70.0 in the Q1 2025 survey.
• US Economy: The US economic outlook is also expansionary, with a strongly confident index of 65.0. This is the highest the metro’s U.S. index has been since Q4 2020.
• Industry Sales: At 63.3, the metro’s sales index was the highest industry component index in the Q1 2025 survey, signaling strong confidence in forecasting increased sales compared to the previous quarter.
• Industry Profits: Montgomery business leaders are also expecting industry profits to increase this quarter compared to their Q4 2024 levels with a strongly expansionary index of 60.0.
• Industry Hiring: The metro’s hiring index has rebounded from its contractionary and neutral forecasts in Q2 and Q3 2024, respectively. The Q1 2025 index of 60.0 indicates strong confidence in an expansionary forecast.
• Industry Capital Expenditures: With an expansionary index of 61.7, metro panelists are anticipating increased capital expenditures this quarter with strong confidence.

ABCI Montgomery in Context

In the Q1 2025 survey, Montgomery’s ABCI registered as strongly expansionary. This comes after almost two years of low business confidence, beginning in Q3 2022, when business leaders began to forecast contractions with mild to moderate confidence. The outlook improved slightly at the end of Q4 2023 with two quarters of mildly optimistic ABCIs before falling to a contractionary index in Q2 2024 and neutral in Q3 2024. From the beginning of 2022 until this most recent quarter, Montgomery’s US outlook has been very strongly contractionary (average of 37.9), which stands in stark contrast to the Q1 2025 index of 63.3.

Panelists in Montgomery had the highest metro ABCI this quarter at 63.3, with strongly confident expansionary forecasts for all of the component indexes. With an ABCI of 61.4, Huntsville had the highest industry sales and hiring indexes of the four participating metros. Birmingham-Hoover followed closely with a Q1 2025 ABCI of 60.6 and notably high expectations for growth in capital spending compared to last quarter. Business leaders in Tuscaloosa expressed moderate confidence in their expansionary forecast with moderate to strong values for all their component indexes. There was not enough participation to include Mobile’s outlook this quarter.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the first quarter 2025 ABCI™ survey. This is the 93rd consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the March 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the second quarter of 2025.

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This report was produced in partnership between the Center for Business and Economic Research at the The University of Alabama’s Culverhouse College of Business and the Montgomery Chamber of Commerce.

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