Montgomery Metro Area Report

Alabama Business Confidence Index™

Fourth Quarter 2025

Montgomery Forecasts Overall Expansion

Montgomery’s ABCI registered at 54.9 in the Q4 2025 survey, signaling moderately confident expectations for expansionary economic conditions compared to Q3 2025. Though this quarter’s ABCI is 1.2 points above last quarter’s mildly expansionary ABCI, this is the second consecutive quarter with an overall expansionary forecast, indicating sustained levels of confidence. In the Q4 2025 survey, all six of Montgomery’s component indexes were above 50, indicating overall expectations for growth. However, the levels of confidence in those forecasts varied from the US economic outlook’s mildly confident index of 51.5 to industry capital expenditures’ strongly confident index of 60.3.

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: Despite decreasing 3.5 points from last quarter’s moderately confident forecast, Montgomery business leaders are still anticipating improved statewide economic conditions in Q4 2025 with a mildly confident index of 54.4.
• US Economy: For the second consecutive quarter, Montgomery’s US economic outlook is mildly expansionary. The index decreased 1.1 points to register at 54.4 in Q4 2025. Just over 47 percent of panelists expect better conditions in the national economy this quarter, while 41 percent are anticipating worse conditions compared to last quarter.
• Industry Sales: Montgomery business leaders are mildly confident that industry sales will increase this quarter with an index of 52.9. This is 2.4 points below last quarter’s moderately confident index.
• Industry Profits: After two consecutive quarters of mildly contractionary forecasts, Montgomery’s business leaders are forecasting growth in industry profits in Q4 2025. The index grew 7.0 points to register at a mildly confident 54.4.
• Industry Hiring: Montgomery’s hiring index remained moderately expansionary this quarter with an index of 55.9, an increase of 0.6 points from the Q3 2025 index.
• Industry Capital Expenditures: Over half of panelists have an expansionary outlook compared to just 18 percent that expect decreased capital spending, resulting in a strongly confident expansionary index of 60.3.

ABCI Montgomery in Context

Over the last ten quarters, Montgomery’s overall business confidence alternated between contractionary and expansionary forecasts. In Q1 2025, metro panelists forecasted growth with strong confidence in all of the component indexes resulting in an ABCI of 63.3. However, those expectations were not sustained leading into Q2 2025, with contractionary forecasts for the statewide and national economies as well as industry profits. In two subsequent quarters, business confidence has been rebounding to mild and moderately expansionary levels in Q3 and Q4 2025.

This quarter, all five of Alabama’s largest metro areas are forecasting overall growth with mild to moderate confidence. The only contractionary component index of all the metros was Birmingham’s US outlook (43.5), but all of the other component indexes across the metros were expansionary or neutral. All metros but Montgomery are forecasting increased sales with strong confidence, but Mobile led in expansionary expectations for the US and Alabama economies. As a result, Mobile had the highest ABCI this quarter. More details can be found in the Statewide ABCI report.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the fourth quarter 2025 ABCI™ survey. This is the 96th 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 2026.

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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.