Tuscaloosa Metro Area Report

Alabama Business Confidence Index™

Fourth Quarter 2021

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Strong Business Confidence anticipated in Q4 2021

In the fourth quarter 2021 Alabama Business Confidence Index (ABCI) survey, business leaders in Tuscaloosa continue to feel strongly optimistic about growth with an index of 60.9. Despite being 7.3 points below the Q3 2021 index, metro panelists are continuing to forecast improved conditions for all of the component indexes. This is the first quarter that the ABCI has decreased since it has been rebounding steadily from it’s Q3 2020 drop after the COVID-19 pandemic was declared a national emergency. Even with the decrease, Tuscaloosa had the highest ABCI of the surveyed metro areas this quarter.

Fourth Quarter 2021 Outlook

Tuscaloosa Statewide
ABCI 60.9 58.0
Alabama Economy 63.1 58.9
US Economy 56.2 50.7
Industry Sales 64.2 60.6
Industry Profits 54.5 56.6
Industry Hiring 63.1 62.0
Industry Capital Expenditures 64.2 59.2

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 index decreased 9.5 points to reach 63.1 this quarter, indicating strong confidence in improved statewide economic conditions compared to the previous quarter.
  • US Economy: Tuscaloosa business leaders are anticipating continued improvement in the national economy, with a moderately positive index of 56.2. This index is a 9.8-point decrease from the Q3 2021 U.S. outlook.
  • Industry Sales: The metro’s sales index is one of the most confident this quarter at 64.2. This is a 6.6-point decrease from Q3 2021’s strongly confident index and signals that Tuscaloosa business leaders expect sales to continue increasing in Q4 2021.
  • Industry Profits: Metro panelists are anticipating increased levels of profits this quarter with a mildly confident index of 54.5, a decrease of 13.0 points from Q3 2021.
  • Industry Hiring: Hiring is forecast to continue increasing in the upcoming quarter with a strongly confident index of 63.1. This is only 2.5 points below the previous quarter’s index.
  • Industry Capital Expenditures: With a strongly positive index of 64.2 after a 2.3-point decrease from the previous quarter, Tuscaloosa business leaders are confidently expecting to increase their capital expenditures compared to Q3 2021.

 

Tuscaloosa Response Breakdown

Historical Tuscaloosa ABCI™ and Industry Component Indexes

ABCI Tuscaloosa in Context

Despite a 7.3-point decrease from the metro area’s extremely confident ABCI of 68.2 in Q3 2021, the Tuscaloosa metro area remains highly confident in their expectations for growth this quarter compared to the previous quarter. In the quarter before the COVID-19 pandemic began in the U.S., Tuscaloosa business confidence was strong. Once the pandemic was declared a national emergency, the metro’s ABCI dropped significantly, hovering around or below 50 for three quarters. Beginning in Q4 2020, the metro’s ABCI has consistently grown more positive over the last four quarters with confidence reaching a record high in Q3 2021. The slight decrease in this quarter’s business confidence could be a reflection of the uncertainties associated with the highly contagious Delta variant.

Though business confidence decreased from the third quarter levels across the state’s metro areas, ABCI panelists are still forecasting growth in Q4 2021. The metro’s hiring indexes were all above 57, indicating sustained expectations for increased hiring despite the higher levels of uncertainty that are reflected in the other indexes. Tuscaloosa had the highest index with a strongly confident ABCI of 60.9, followed by Huntsville at a more moderate 58.8, Mobile at 56.6, and Montgomery at 55.9. Birmingham-Hoover had the lowest metro ABCI this quarter at a mildly positive 54.2.

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 fourth quarter 2021 ABCI™ survey. This is the 80th 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 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 Stephanie Normanyo, Economic Forecaster, and Susannah Robichaux, Socioeconomic Analyst, Center for Business and Economic Research, Culverhouse College of Business, The University of Alabama.

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