Montgomery Metro Area Report

Alabama Business Confidence Index™

Third Quarter 2026

Moderately Confident Forecast for Growth in Q3

Business leaders in Montgomery are forecasting economic expansion with moderate confidence in the Q3 2026 ABCI. The ABCI registered at 56.2 for the quarter, with all six of the component indexes indicating expectations for growth, though with varying levels of confidence. The index for the Alabama economic outlook was the highest component index this quarter at a strongly confident 62.5, followed closely by industry sales at 60.9. In contrast, panelists are only mildly confident that their capital expenditures will increase this quarter (51.6) or that the US economy will improve (53.1) compared to last quarter.

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: This quarter, Montgomery business leaders are anticipating growth in the Alabama economy with a strongly confident index of 62.5. Only 6.2 percent of panelists are anticipating a worse economy compared with Q2 2026.
• US Economy: Expectations for the US economy are mildly expansionary in Q3 2026, with an index of 53.1, which is slightly higher than the overall statewide outlook for the national economy.
• Industry Sales: Over 56 percent of metro panelists anticipate increased sales compared to last quarter, resulting in a strongly confident index of 60.9.
• Industry Profits: The profits index for Q3 2026 was 54.7, communicating moderately confident expectations for increased profits compared to last quarter’s levels.
• Industry Hiring: Montgomery panelists are also forecasting overall increased levels of hiring in Q3 2026 with a moderately confident index of 54.7.
• Industry Capital Expenditures: Expectations for capital expenditures are mildly expansionary this quarter with an index of 51.6. Half of metro business leaders expect their capital spending levels not to change in Q3 2026 compared to last quarter.

ABCI Montgomery in Context

From Q2 2022 to Q3 2024, Montgomery’s ABCI fluctuated between expansionary and contractionary levels, with forecasts for the US economy being consistently contractionary while expectations for industry component indexes ranged from moderately contractionary to moderately expansionary from quarter to quarter. There was a large spike in business confidence in Q1 2025 in every component index, before expectations rebounded the next quarter. In Q3 2025, the only contractionary index was profits, but in the subsequent quarters, all of Montgomery’s component indexes have been positive or neutral, leading to a string of expansionary ABCIs over the last five quarters.

For the third consecutive quarter, the ABCIs from four of Alabama’s five largest metro areas were all expansionary. In Q3 2026, panelists in Huntsville are forecasting increased sales and profits with strong confidence, while business leaders in Montgomery are anticipating higher sales and improved statewide economic conditions with strong confidence. Business leaders in Tuscaloosa and Birmingham are more conservative in their expectations, with mostly mildly confident expansionary component indexes mixed with neutral or mildly contractionary outlooks for the US economy and industry hiring.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the third quarter 2026 ABCI™ survey. This is the 99th 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 2026.

  & 

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.