Montgomery Metro Area Report

Alabama Business Confidence Index™

Third Quarter 2025

Growth Forecasted in Q3 2025

Montgomery business leaders are forecasting overall economic growth with mild confidence in the Q3 2025 ABCI survey. Five of the six of the component indexes are above 50, signaling expansionary expectations, though the level of confidence in each forecast varied. On the higher end, metro panelists are moderately confident that Alabama economy will improve this quarter compared to Q2 2025. On the lower end, the forecasts for the US economy and capital expenditure are also expansionary but are much closer to 50, indicating mild confidence. The one contractionary component index this quarter was industry profits, which panelists are mildly confident will decrease 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: The Alabama outlook registered at 57.9 in the Q3 2025 ABCI survey, indicating moderately confident expectations for improved conditions in the statewide economy compared to those seen in Q2 2025. This is a 10.8-point increase from Q2’s mildly contractionary forecast.
• US Economy: Montgomery’s Q3 2025 forecast for the US economy was 52.6, up 8.5 points from last quarter, indicating mildly confident expectations for an improved US economy this quarter compared to Q2 2025.
• Industry Sales: Montgomery business leaders are forecasting an increase in their industry sales in Q3 2025 compared to last quarter with a moderately confident expansionary index of 55.3.
• Industry Profits: The metro’s profits index remained mildly contractionary in the Q3 2025 survey with an index of 47.4, only 0.3 points above the Q2 index. This was Montgomery’s only contractionary component index for the quarter.
• Industry Hiring: Like the sales forecast, industry hiring is expected to increase this quarter compared to last with moderate confidence. The index increased 5.3 points from Q2’s neutral outlook to register at 55.3 this quarter.
• Industry Capital Expenditures: The index for industry capital expenditures was 53.9 in the Q3 2025 survey, up 2.4 points from last quarter, communicating a mildly confident expansionary forecast.

ABCI Montgomery in Context

Montgomery’s ABCI rebounded to a mildly confident 53.7 in the Q3 2025 survey. In 2023 and 2024, the metro’s business confidence fluctuated between moderately contractionary and mildly expansionary forecasts. During that time, panelists mostly had strongly contractionary indexes for the US economy and much more optimistic but still mixed expectations for the other component indexes. The metro’s Q1 2025 ABCI rocketed up to 63.3 as panelists forecasted growth across all components with strong confidence. However, those high expectations were not sustained in Q2 2025, with contractionary outlooks for profits and the local and national economies.

The forecasts from Alabama’s metros were primarily neutral, with the ABCIs for Huntsville, Tuscaloosa, and Birmingham all very close to 50, indicating overall expectations for a continuation of last quarter’s levels. In general, panelists in these metros are expecting industry sales to increase and conditions in the US economy to worsen compared to the previous quarter. Montgomery had the highest metro ABCI this quarter at a mildly expansionary 53.7, which is a 5.4-point increase from their mildly contractionary Q2 outlook. 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 third quarter 2025 ABCI™ survey. This is the 95th 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 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.