Tuscaloosa Metro Area Report

Alabama Business Confidence Index™

Second Quarter 2022

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Panelists Forecast Industry Growth but Worse Economic Conditions in Q2 2022

Business confidence in Tuscaloosa is mildly confident in the Q2 2022 ABCI survey, registering at 51.8 for the quarter. This is a 6.0-point decrease from Q1 2022 and reflects the disparate forecasts for the industry component indexes versus those for the overall economy. Despite decreases in the indexes, Tuscaloosa business leaders are still forecasting growth for sales, hiring, capital expenditures, and profits compared to the previous quarter. They are significantly less optimistic about the U.S. and Alabama economies, with expectations for worsening conditions in Q2 2022.

Second Quarter 2022 Outlook

Tuscaloosa Statewide
ABCI 51.8 54.6
Alabama Economy 46.5 52.3
US Economy 35.0 38.5
Industry Sales 60.5 61.4
Industry Profits 54.0 55.2
Industry Hiring 58.5 62.9
Industry Capital Expenditures 56.0 57.5

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: The metro’s outlook for the Alabama economy in Q2 2022 is mildly negative with an index of 46.5 after decreasing 10.9 points from Q1 2022. This is substantially lower than Q3 2021’s record high index of 72.6.
  • US Economy: Panelists are forecasting worse conditions in the U.S. economy this quarter with strong confidence. The index registered at 35.0 in the Q2 2022 survey, which is 11.3 points below the Q1 2022 level and 31.0 points below the Q3 2021 peak.
  • Industry Sales: Tuscaloosa’s outlook for industry sales decreased 2.7 points from Q1 2022 to register at a strongly confident 60.5. The metro’s sales index has been its highest indicator for four of the last five quarters.
  • Industry Profits: Business leaders in Tuscaloosa are expecting increased profits this quarter with a mildly confident index of 54.0, which is a 2.6-point decrease from the Q1 2022 index.
  • Industry Hiring: The Tuscaloosa hiring index registered at a moderately confident 58.5 in Q2 2022, a 5.5-point decrease from Q1 2022. Only 8.0 percent of panelists expect to decrease hiring in the coming quarter.
  • Industry Capital Expenditures: The capital expenditures index decreased by 3.6 points from Q1 2022 to reach a moderately confident 56.0 in Q2 2022.

 

Tuscaloosa Response Breakdown

Historical Tuscaloosa ABCI™ and Industry Component Indexes

ABCI Tuscaloosa in Context

Tuscaloosa business confidence has declined greatly in the three quarters since its peak in Q3 2021, but the ABCI has remained above 50, indicating an overall positive outlook. The index was negative in Q3 2020 as the \textsc{covid}-19 pandemic was first present; but fortunately, Tuscaloosa’s overall business confidence rebounded steadily and fairly quickly as businesses were able to adapt and reopen. This quarter’s ABCI of 51.8 remains mildly positive despite a strong negative outlook for the U.S. economy. Nevertheless, Tuscaloosa’s business leaders continue to have a positive outlook for profits, sales, hiring, and capital expenditures.

Overall, confidence throughout Alabama’s metro areas waned but remained positive in Q2 2022 with all of the ABCIs registering over 50. The indexes for industry hiring and sales were fairly high across metros, but negative expectations for the U.S. economy weighed heavily on all of the metros’ ABCIs. Huntsville and Birmingham–Hoover had ABCIs above the state average at moderately confident levels of 58.3 and 56.2, respectively. Mobile’s business leaders are mildly confident with an index of 53.6. Tuscaloosa and Montgomery remained positive but were very close to the neutral index of 50, indicating very mild business confidence compared to Q1 2021.

ABCI™ by Metro Area

Tuscaloosa ABCI™ Compared to Statewide ABCI™

 

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the second quarter 2022 ABCI™ survey. This is the 82nd consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the June 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the third quarter of 2022.

 

  &  Logo of the Birmingham Business Alliance

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 Dr. Nyesha Black and Susannah Robichaux, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.

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