Tuscaloosa Metro Area Report

Alabama Business Confidence Index™

Fourth Quarter 2024

Tuscaloosa Forecast Remains Optimistic in Fourth Quarter 2024

Tuscaloosa’s ABCI increased 2.3 points in the Q4 2024 survey to reach 53.4, signaling continued mild confidence for economic expansion in the coming quarter. Business leaders in the metro are feeling optimistic about growth in all of the ABCI categories this quarter, with all of the component indexes registering above 50.5 for the first time since Q4 2021. Five of Tuscaloosa’s six component indexes either remained steady or increased compared to their Q3 2024 levels, with expectations for the US outlook increasing the most dramatically. The US outlook gained 11.5 points to register as expansionary for the first time since Q4 2021.

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

Tuscaloosa Component Index Analysis

• Alabama Economy: Tuscaloosa business leaders are anticipating improved economic conditions in Alabama compared to Q3 2024, resulting in a 2.3-point increase to reach a mildly expansionary 53.9.
• US Economy: The US economic outlook increased 11.5 points from Q3 2024’s moderately contractionary outlook to reach a mildly optimistic index of 52.6 for the first time in eleven quarters.
• Industry Sales: For the fifth consecutive quarter, the sales index was the metro’s highest component index. The Q4 2024 index was 59.2 after increasing 0.3 points from Q3 2024. Almost half of Tuscaloosa panelists are expecting their sales to increase in Q4 2024 compared to the previous quarter.
• Industry Profits: With a Q4 2024 index of 52.0, metro panelists are forecasting an increase in industry profits compared to last quarter’s levels with mild confidence. This quarter’s index is 2.0 points above Q3 2024’s neutral outlook.
• Industry Hiring: Tuscaloosa’s hiring index remained mildly expansionary this quarter, increasing 0.4 points to reach 52.0 in the Q4 2024 survey. Besides a mildly negative index of 49.5 in Q1 2023, the index has been expansionary since Q1 2021.
• Industry Capital Expenditures: Tuscaloosa panelists are forecasting a continuation of last quarter’s levels of capital expenditure with a neutral index of 50.7. This is a 1.7-point decrease from Q3 2024.

ABCI Tuscaloosa in Context

Tuscaloosa business confidence dropped below 50 for four out of the five quarters from Q3 2022 to Q3 2023 as panelists’ concerns for the US and Alabama economies and expectations for decreased profits exerted a downward pull on the index. However, since Q4 2023, the metro’s overall ABCI has been expansionary largely due to moderately strong forecasts for increased sales (average index of 59.4 from Q4 2023 to Q4 2024) and mildly confident expectations for increased hiring (average index 53.3) and improved conditions in the Alabama economy (average index 52.9).

Business confidence in Alabama’s metros varied this quarter. Tuscaloosa had the highest Q4 2024 metro ABCI at 53.4, with expansionary outlooks for all component indexes. Panelists in Huntsville are expecting a continuation of last quarter’s conditions for four of their six component indexes, along with a moderately negative forecast for the US economy and a mildly positive outlook for industry sales, resulting in an ABCI of 49.2. The Birmingham-Hoover ABCI was mildly negative at 47.2 this quarter with moderately contractionary forecasts for hiring, the US outlook, and capital spending. There was not enough participation to include Mobile or Montgomery’s outlook this quarter.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the fourth quarter 2024 ABCI™ survey. This is the 92nd 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 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 Chamber of Commerce of West Alabama.

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