Tuscaloosa Metro Area Report

Alabama Business Confidence Index™

First Quarter 2025

Business Confidence Continues to Strengthen in Q1 2025

Business leaders in Tuscaloosa are forecasting economic growth in Q1 2025 with a moderately confident ABCI of 58.6. This index is a 5.2-point increase from last quarter’s mildly expansionary index, fueled by increases in confidence across all of the component indexes but especially for the metro’s statewide and US economic outlooks. The levels of confidence for each component index varied, ranging from mild to strong. This is the metro’s fourth consecutive quarter of expansionary ABCIs, indicating sustained expectations for economic growth.

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 Q1 2025 Alabama economic index registered at 63.1 after increasing 9.2 points from last quarter, indicating strongly confident expectations for improved statewide economic conditions compared to Q4 2024.
• US Economy: Tuscaloosa business leaders are continuing to anticipate improvements in the U.S. economy compared to the previous quarter, as the index grew by 10.5 points from a mildly confident index of 52.6 in Q4 2024 to a strongly confident of 63.1 in Q1 2025.
• Industry Sales: Industry sales are forecasted to continue growing in Q1 2025 with a strongly confident index of 60.6. This is a 1.4-point increase from Q4 2024’s index and is the metro’s highest industry component index for the quarter.
• Industry Profits: The Q1 2025 profits index increased 2.4 points from Q4 2024 to remain mildly confident with an expansionary forecast of 54.4.
• Industry Hiring: Tuscaloosa’s hiring index grew 3.0 points from last quarter to reach a moderately expansionary 55.0 in the Q1 2025 survey. Only 15.0 percent of panelists expect to decrease hiring this quarter compared to their Q4 2024 levels.
• Industry Capital Expenditures: The metro’s capital expenditures index also registered as moderately expansionary after increasing 4.9 points to register at 55.6 for Q1 2025.

ABCI Tuscaloosa in Context

Tuscaloosa’s business confidence was moderately expansionary this quarter at 58.6. This is the highest the metro’s ABCI has been since Q4 2021. After forecasting economic contractions from Q1 to Q3 2023, Tuscaloosa’s business leaders began feeling more confident in Q4 2023 and Q1 2024, resulting in a mildly expansionary and a neutral ABCI, respectively. This was due to strengthened expectations for the industry component indexes, with indexes ranging from neutral to strongly expansionary, never dropping into contractionary forecasts. In contrast, the US outlook remained quite low, until this quarter, as panelists anticipate improved economic conditions locally and nationally.

Panelists in Montgomery had the highest metro ABCI this quarter at 63.3, with strongly confident expansionary forecasts for all of the component indexes. With an ABCI of 61.4, Huntsville had the highest industry sales and hiring indexes of the four participating metros. Birmingham-Hoover followed closely with a Q1 2025 ABCI of 60.6 and notably high expectations for growth in capital spending compared to last quarter. Business leaders in Tuscaloosa expressed moderate confidence in their expansionary forecast with moderate to strong values for all their component indexes. There was not enough participation to include Mobile’s outlook this quarter.

The Center for Business and Economic Research would like to thank the Alabama business executives who completed the first quarter 2025 ABCI™ survey. This is the 93rd consecutive quarter this report has been recorded, and it would not have been possible without your participation.
Be sure to log in during the March 1–15 survey window to record your opinions about economic prospects and industry performance looking ahead to the second quarter of 2025.

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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.