Tuscaloosa Metro Area Report

Alabama Business Confidence Index™

First Quarter 2026

Tuscaloosa Forecasts Growth in Q1 2026

Tuscaloosa’s ABCI registered at 56.9 in the Q1 2026 survey, signaling moderately confident expectations for expansionary economic conditions compared to Q4 2025. This quarter’s ABCI is 2.9 points above last quarter’s mildly expansionary ABCI, making it the second consecutive quarter with an overall expansionary forecast. In the Q1 2026 survey, all six of Tuscaloosa’s component indexes were above 50, indicating overall expectations for growth. However, the levels of confidence in those forecasts varied from the industry profits’ mildly confident index of 52.5 to hiring’s strongly confident index of 60.0.

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: After increasing 3.5 points from last quarter’s mildly expansionary forecast, Tuscaloosa business leaders are anticipating improved statewide economic conditions in Q1 2026 with a moderately confident index of 57.5.
• US Economy: For the second consecutive quarter, Tuscaloosa’s US economic outlook is mildly expansionary. The index increased 3.2 points to register at 54.2 in Q1 2026.
• Industry Sales: Metro panelists remained moderately confident that industry sales will increase this quarter with an index of 59.2. This marks the metro’s tenth consecutively expansionary forecast for sales.
• Industry Profits: After two consecutive quarters of mildly contractionary forecasts in Q2 and Q3 2025 followed by a mildly expansionary forecast in Q4 2025, Tuscaloosa’s business leaders are anticipating another quarter of increased industry profits in Q1 2026. The index grew 0.5 points to remain at a mildly confident 52.5.
• Industry Hiring: Tuscaloosa’s hiring index registered as strongly expansionary this quarter at 60.0, an increase of 5.0 points from Q4 2025. Only 3.3 percent of panelists expect to decrease hiring in Q1 2026 compared to their previous quarter’s levels.
• Industry Capital Expenditures: Just under 47 percent of panelists have an expansionary outlook for capital expenditures this quarter compared to the 17 percent that expect to decrease their capital spending, resulting in a moderately confident expansionary index of 58.3.

ABCI Tuscaloosa in Context

Over the last ten quarters, Tuscaloosa’s overall forecasts have been primarily expansionary with confidence ranging from mild to moderate. In Q1 2025, metro panelists forecasted growth in the statewide and national economies with strong confidence, resulting in an ABCI of 58.6. However, those expectations were not sustained leading into Q2 2025, with the ABCI pulled to a mildly negative 48.7 due to contractionary forecasts for the statewide and national economies as well as industry profits. Confidence has rebounded in the subsequent quarters with expansionary forecasts for all of the component indexes in both the Q4 2025 and Q1 2026 ABCI surveys, indicating sustained expectations for growth.

For the second consecutive quarter, all five of Alabama’s largest metro areas have an expansionary outlook, though the level of confidence in those forecasts varies significantly. Mobile had the highest metro ABCI at 64.3, communicating strongly confident expectations for improved economic conditions in Q1 2026 compared to Q4 2025. Tuscaloosa had a moderately confident outlook of 56.9, while business leaders in Montgomery, Huntsville, and Birmingham all had much milder confidence in their expansionary forecasts. 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 first quarter 2026 ABCI™ survey. This is the 97th 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 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 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.