Alabama Business™
Established in 1930, each issue contains a free quarterly Alabama economic forecast update.
Economic Outlook Update:
Alabama Business | August 2025
- Alabama’s economy, as measured by inflation adjusted Gross Domestic Product (GDP) grew by 0.3 percent during first quarter 2025, totaling $257.5 totaling $252.7 billion. For 2025, the state’s economy is expected to grow by about 1.1 percent in 2025, following a 3.0 percent rate of growth seen in 2024.
- The State gained 500 jobs in June over the previous month, bringing the total net gain in jobs to 22,400 from June 2024 to June 2025, while the seasonally adjusted unemployment rate increased from 2.9 percent to 3.2 percent, employment is expected to grow by about 0.9 percent in 2025.
- During the twelve-month period ending in June 2025, seasonally adjusted number of unemployed workers rose from 69,099 to 75,624 while the labor force participation rate went up from 57.5 percent in June 2024 to 58.0 percent in June 2025.
- Year to date, total tax revenues increased by 3.0 percent in July 2025 to approximately $14.5 billion during the first 10 months of the current fiscal year. For the same period sales tax receipts increased by 1.1 percent to about $2.6 billion while individual income tax revenues went up 5.2 percent, totaling approximately $5.9 billion. Total tax revenues are forecasted to increase by about 1.5 percent for the FY2024-2025.
- For the first six months of the year, Alabama exports totaled $13.3 billion, down from approximately $14 billion for the same period during previous year. Transportation equipment remained state’s largest export, declining from approximately $7.3 billion during first six months in 2024 to $7.0 billion for the same period in 2025. Canada remained the largest destination for Alabama exports, totaling $$2.5 billion for the first six months of 2025, compared to $2.3 billion for the same period in 2024, followed by Mexico ($2.1 billion), Germany ($2.0 billion), China ($1.5 billion), and India ($513 million).
- For the first six months of the year, Alabama imports totaled approximately $17.6 billion, down from $19.5 billion for the same period during previous year. Imports from Mexico totaled $3.2 billion for the first six months of 2025, compared to $3.7 billion for the same period in 2024, followed by South Korea (approximately $3.0 billion), Germany and Canada ($1.7 billion each), and China ($1.6 billion). Transportation equipment was the largest import (almost $6.4 billion), followed by nonelectrical machinery ($1.6 billion), oil and gas, and electrical equipment and appliances (approximately $1.3 billion each). each).
- The US economy grew by 3.0 percent in the second quarter, following a 0.5 percent decline seen in the first quarter. Growth in the second quarter was primarily due to consumer spending and a decline in imports. Business spending fell by 15.6 percent while residential investments dropped 4.6 percent. Exports also fell by 1.8 percent. U.S. economy is expected to grow by 1.4 in 2025, while consumer spending will grow by 2.0 percent, with business spending increasing by 1.7 percent.
- U.S. inflation rate, as measured by consumer price index (CPI) rose by an annualized rate of 3.0 percent in 2024, and is expected to increase by 2.7 percent in 2025.
- The US economy added 73,000 jobs in July while the unemployment rate was 4.2 percent. Most of the job gains were seen in healthcare (55,000) and social assistance (18,000). Payrolls in all remaining sectors of the economy changed very little or remained flat. Overall employment is expected to increase by 1.1 percent in 2025, followed by a 0.3 percent increase in 2026.
