UA Economists Forecast Moderate Growth for Alabama in 2025
- February 19th, 2025
TUSCALOOSA — Alabama’s economy will likely continue to grow in 2025, with real output at a rate of 2.3 % say economists at The University of Alabama. In the annual report from UA’s Center for Business and Economics Research, economists temper optimism with caution.
“The optimistic forecast is driven by an expectation of continued consumer spending, reduced inflation, and supportive fiscal policy,” said Dr. Kilungu Nzaku, an associate research economist at CBER. “However, current and ongoing events on trade have injected some uncertainty into the economy. If unchanged, the announced and proposed tariffs could usurp gains made in curtailing inflation and slow economic growth.”
CBER’s economists expect the most robust gains in sectors that heavily depend on consumer spending such as accommodation and food services; real estate, rentals and leasing; arts, entertainment and recreation; retail trade; and educational and health services. Sectors with a less favorable economic and employment outlook include mining and natural resources, textile mills, and industries related to printing.
CBER’s newly released Alabama Economic Outlook, unveiled at the 2025 Alabama Economic Outlook Conference in January, includes 2025 economic forecast for the nation, Alabama and the metro areas, as well as an overview of 2024 economic performance. The full report is available on the center’s website.
This year’s outlook features an article from demographer Dr. Nyesha Black detailing Alabama’s slowing population growth. Demographic analysis shows that the number of deaths now exceed births in Alabama for the first time since CBER began tracking vital statistics data in 1930. However, relocation to the state has allowed the population to continue growing.
CBER also previewed a new county economic impact calculator, developed by CBER’s economists, which will allow economic development practitioners to estimate the economic impact of new investment projects for all 67 counties in Alabama. The economic impact calculator will be available to the public in an online format later this year.
Part of the Culverhouse College of Business, UA’s Center for Business and Economic Research has produced forecasts of economic activity in Alabama since 1980. These forecasts cover Alabama’s gross domestic product, employment and income by industry group and are published in the annual Alabama Economic Outlook. Forecast updates are ran quarterly. The center incorporates data from the last 30 years, including cycles and recoveries captured over the years, into its statistical and economic models.
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The University of Alabama, part of The University of Alabama System, is the state’s flagship university. UA shapes a better world through its teaching, research and service. With a global reputation for excellence, UA provides an inclusive, forward-thinking environment and nearly 200 degree programs on a beautiful, student-centered campus. A leader in cutting-edge research, UA advances discovery, creative inquiry and knowledge through more than 30 research centers. As the state’s largest higher education institution, UA drives economic growth in Alabama and beyond.