Tuscaloosa Metro Area Report

Alabama Business Confidence Index™

Second Quarter 2024

Growth Forecast with Moderate Confidence

Tuscaloosa’s ABCI grew 6.2 points to reach 57.1 in the Q2 2024 survey, indicating moderately confident expectations for growth in this quarter compared to last quarter’s levels. Five of the six component indexes were mildly to strongly expansionary in the most recent survey. Only the US outlook wasn’t expansionary, instead registering at a neutral 50.0, indicating expectations for a continuation of last quarter’s economic conditions rather than a forecast for worse conditions compared to the previous quarter. Metro business leaders are most optimistic about growth in industry sales with Tuscaloosa’s sales index being the highest across the state.

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’s economic index for Alabama increased 5.9 points to reach a moderately expansionary 57.7 in the Q2 2024 survey. This is the metro’s highest index for the statewide economy in two years.
• US Economy: After nine consecutive quarters of contractionary forecasts, Tuscaloosa’s US outlook grew 6.0 points to reach a neutral 50 for the quarter, indicating expectations for an overall continuation of last quarter’s conditions.
• Industry Sales: Over sixty percent of metro panelists are expecting their industry sales to grow in Q2 2024, resulting in a 9.5-point increase from last quarter’s moderately confident sales index to a very strongly expansionary index of 65.5.
• Industry Profits: Tuscaloosa panelists are forecasting industry profit growth with moderate confidence in Q2 2024. The index registered at 58.3 after increasing 6.5 points from Q1 2024.
• Industry Hiring: The hiring index for Tuscaloosa is moderately expansionary this quarter at 57.1. This is a 4.7-point increase from last quarter and is the highest the index has been since Q4 2022.
• Industry Capital Expenditures: After a brief dip below 50 last quarter, the metro’s capital spending index rebounded 4.8 points this quarter to reach a mildly expansionary 54.2 this quarter.

ABCI Tuscaloosa in Context

After reaching a historic high of 68.2 in Q3 2021, Tuscaloosa’s ABCI has decreased and fluctuated between expansionary and contractionary forecasts, though Tuscaloosa’s business confidence has been trending upward over the last six quarters. This comes as metro business leaders’ expectations for the US outlook become less contractionary and forecasts for the industry component indexes have been more confidently expansionary. Tuscaloosa’s sales index has been moderately or strongly positive for three consecutive quarters now; hiring has had an expansionary forecast for five consecutive quarters; profits for two quarters; and capital expenditures has rebounded to a moderately expansionary level in the Q2 2024 survey.

Business confidence across Alabama’s metro areas is mostly positive in Q2 2024, with business leaders in all but Montgomery forecasting growth compared to the previous quarter. Tuscaloosa had the highest metro ABCI with a moderately confident 57.1, followed closely by Huntsville with 55.1. Panelists in Birmingham–Hoover and Mobile had mildly confident expansionary forecasts of 53.5 and 52.8, respectively. Montgomery, who had the highest MSA ABCI last quarter at a mildly positive 51.9, dropped almost 6 points to a mildly negative index of 46.1.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the second quarter 2024 ABCI™ survey. This is the 90th 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 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.