Tuscaloosa Metro Area Report

Alabama Business Confidence Index™

Third Quarter 2023

Tuscaloosa Businesses have Mildly Negative Outlook for Q3 2023

Though the Tuscaloosa ABCI remained below 50 in the Q3 2023 survey, business leaders are only mildly confident in that negative forecast with an index of 48.0. This is 2.3 points above last quarter’s business confidence levels, pulled upward by improved forecasts for the Alabama economy and industry capital expenditures. Despite decreasing slightly this quarter, Tuscaloosa’s industry hiring index remained the highest component index, but the mildly positive forecast for that still contrasts dramatically with metro panelists’ strongly negative expectations for 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: After two quarters of negative forecasts, metro panelists are anticipating better statewide economic conditions in Q3 2023 with the AL economy index gaining 6.7 points to reach a mildly confident 51.0.
• US Economy: Despite a 3.8-point increase in the US economy index, slightly more than half of Tuscaloosa business leaders are still forecasting a contraction in the US economy this quarter, resulting to a very strongly negative index of 38.0.
• Industry Sales: This quarter, the Tuscaloosa sales index decreased by 1.8 points to register at a neutral index of 49.5, indicating expectations for a continuation of last quarter’s level of sales.
• Industry Profits: With an index of 46.4, panelists are continuing to forecast decreased industry profits with mild confidence in Q3 2023. This is a 0.8-point increase from Q2 2023.
• Industry Hiring: The Q3 2023 hiring index registered at a mildly positive 52.6 after decreasing 0.9 points from last quarter as metro panelists continue to forecast increased hiring compared to Q2 2023.
• Industry Capital Expenditures: Tuscaloosa panelists expect a continuation of last quarter’s levels of capital expenditure after the index grew 5.3 points to reach a neutral 50.5.

ABCI Tuscaloosa in Context

Tuscaloosa’s ABCI registered at a mildly negative 48.0 in Q3 2023, which was a small increase from Q2 2023’s index. Business confidence in the metro area rose to a historic peak in Q3 2021, but the following quarter, panelists’ confidence began to decrease, starting with a drop in the US economic index. The negative expectations for the national economy have only become more pronounced since then, averaging 35.4 over the last seven quarters. Meanwhile, many of the industry forecasts first registered as negative in Q1 2023, which has led to three consecutive quarters of mildly negative ABCIs for Tuscaloosa.

Business confidence across metros varied in the Q3 2023 survey. For the second consecutive quarter, Huntsville was the only metro with a positive ABCI and positive forecasts for all industry component indexes. Tuscaloosa’s ABCI was mildly negative with positive forecasts for hiring and the AL economy. Montgomery and Birmingham–Hoover followed next with mostly negative component indexes but expectations for capital expenditure growth. Mobile had the lowest ABCI this quarter at a moderately negative 43.0.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the third quarter 2023 ABCI™ survey. This is the 87th 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 2023.

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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.