Executive Summary––Third Quarter 2011 Alabama Business Confidence Index™

ABCI:  The state’s business executives are likely to be more cautious in their planning for third quarter 2011, as overall confidence about the business environment and industry prospects declined.  The University of Alabama’s Alabama Business Confidence Index™ (ABCI) fell 4.4 points to 51.4, indicating that the recovery will continue at a slower pace this quarter.  Concerns about the U.S. economy factor heavily into this outlook, although all components of the index were down.

National Economic Outlook:  Optimism about prospects for
moderate economic expansion seen in the first two ... more



Mid-Year Updates to the Economic Outlook 2011 Metro Areas

Alabama Metropolitan Areas is a section of the Center’s annual Alabama Economic Outlook which highlights quality of life issues and regional progress.  These are the local economic concerns that affect and enrich the lives of residents across our state’s 11 metro areas.

Find out the major advancements and losses that shaped 2010 through free access to this valuable resource.  See how your metro area is doing with new detailed maps, and up-to-date comparisons between the state’s metro areas.

Click here to continue to the Alabama Metropolitan Areas 2011

Preliminary Economic and Fiscal Impact of the April 27, 2011 Tornadoes in Alabama

Preliminary macroeconomic impact estimates of the April 27, 2011 tornadoes that hit Alabama are reductions of (i) 0.2-0.5 percent in employment or 5,600-13,200 jobs, (ii) 0.2-0.5 percent
in state tax collections or $19.1-44.5 million, (iii) 0.5-0.7 percent
in Alabama Gross Domestic Product (GDP) or $835 million
to $1.3 billion, and (iv) $4.4-10.2 million in local sales tax collections.  These loss effects are expected to be experienced
in 2011 only.   more



UA Economists See Alabama Economic Growth Continuing, Despite Challenges

Economists at The University of Alabama’s Center for Business and Economic Research (CBER) expect the state’s economy to continue to rebound in the second quarter of 2011.  However, high food and energy costs are constraining broader consumer spending gains and Japan’s recent natural disasters are impacting the state’s automotive industry.  As a consequence, the Center has lowered its forecast for Alabama GDP growth in 2011 from around 3.5 percent on our first quarter outlook to about 3.0 percent this quarter.

Despite temporary production cutbacks at Honda and Toyota, transportation equipment manufacturing, including both the automotive and shipbuilding industries, should help drive the recovery throughout 2011.  Steel manufacturing and the healthcare sector are also expected to be key contributors.  And BRAC moves continue to boost the economies of North and Southeast Alabama as they progress toward a September completion.  Exports are boosting the recovery, with a 26 percent rebound in 2010 bringing shipments close to prerecession levels. 

But there are also significant challenges.  The state’s sizeable professional, scientific, and technical services sector, impacted by changing federal defense and space spending priorities, lost 2,100 jobs over the past 12 months.  In the face of fading federal stimulus funding and weak growth in tax revenues, local governments cut employment by 3,100 over the last year.  And a modest rebound in total tax revenues is not enough to make up for the declining stimulus as state government struggles to fund services and public education. 

The employment picture is slowly improving and from March 2010 to March 2011 Alabama added 10,400 jobs.  While job trends were mixed across the 11 metros over the past year, every area except Gadsden, which was flat, added jobs in March.  CBER now expects the state’s employment to increase 0.8 percent in 2011, with the addition of around 14,000 jobs—a slightly more optimistic forecast than last quarter.

Unemployment continues to decline; the seasonally adjusted rate of 9.2 percent in March 2011 is down from 10.0 percent a year ago.  Every metro saw unemployment rates fall in March, although unemployment remains stubbornly in double-digits in many Alabama counties.

Business sentiment for the second quarter of 2011, measured by the Center’s Alabama Business Confidence Index™ (ABCI) survey, rose 0.8 points to 55.8.  Although improvement in the general economic environment is expected to be weaker, the ABCI reading indicates that the economic recovery should be on firm ground and sustainable in the second quarter.  However, the state’s business executives expect hiring and capital spending to pick up only modestly.

The Center for Business and Economic Research has released preliminary macroeconomic impact estimates of the BP Deepwater Horizon oil spill on Alabama for 2010. more

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