Tuscaloosa Metro Area Report

Alabama Business Confidence Index™

Third Quarter 2024

Subdued Expansionary Forecast in Q3 2024

Business confidence in the Tuscaloosa metro area decreased by 6.0 points to reach a mildly expansionary 51.1 in the Q3 2024 ABCI survey. While this is lower than last quarter’s ABCI, it still signals mildly confident expectations for an overall increase in economic activity in the coming quarter. Five of the six metro component indexes decreased by at least five points in the Q3 2024 survey, except for the industry capital expenditures index, which only decreased by 1.8 points to remain mildly expansionary. Tuscaloosa business leaders are most confident forecasting an increase in industry sales and a worsening of the US economy.

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 Alabama outlook fell 5.3 points to reach a mildly expansionary 52.4 in the Q3 2024 survey.
• US Economy: Over 45 percent of Tuscaloosa business leaders are forecasting a contraction in the U.S. economy in Q3 2024 compared to last quarter, resulting in a moderately contractionary index of 41.1 for Q3 2024. This is an 8.9-point decrease from Q2 2024’s neutral US outlook.
• Industry Sales: Tuscaloosa’s industry sales index was the metro’s most confident expansionary forecast in Q3 2024 with a moderately confident index of 58.9 after decreasing 6.6 points from last quarter.
• Industry Profits: The metro’s profits index decreased 8.3 points in the Q3 2024 survey, as 54.8 percent of panelists forecast a continuation of last quarter’s profit levels, to reach a neutral index of 50.0.
• Industry Hiring: The metro’s hiring index registered as mildly expansionary in Q3 2024 at 51.6, decreasing 5.5 points from last quarter but remaining overall expansionary for the sixth consecutive quarter.
• Industry Capital Expenditures: The index for industry capital expenditures decreased 1.8 points to remain mildly expansionary in the Q3 2024 survey.

ABCI Tuscaloosa in Context

Tuscaloosa’s ABCI reached a historic high of 68.2 in Q3 2021 before falling back to more moderate and mild expansionary forecasts through Q2 2022. Then, in Q3 2022, the metro forecasted a decrease in economic activity compared to the previous quarter for the first time since Q3 2020 as panelists forecasted worse conditions for the Alabama and US economies with very strong confidence. Tuscaloosa’s ABCI rebounded briefly in Q4 2022 thanks to strong industry forecasts, before registering as contractionary for three consecutive quarters. Starting in Q4 2023, the index has been neutral or expansionary thanks to improved forecasts for the Alabama economy and mild to moderately confident expectations for industry growth.

Business confidence remained mildly expansionary across Alabama this quarter. Birmingham-Hoover and Huntsville had the highest metro ABCIs this quarter at a mildly confident 53.3. Panelists in Birmingham-Hoover had the highest confidence forecasting profit growth of any metro this quarter, while Huntsville business leaders are expecting hiring growth with more confidence than their peers. Tuscaloosa had a very mildly confident Q3 2024 ABCI of 51.1, and Montgomery had a neutral index of 50 this quarter, indicating expectations for a continuation of last quarter’s overall conditions.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the third quarter 2024 ABCI™ survey. This is the 91st 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 2024.

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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.