Alabama Business

Established in 1930, each issue contains a free quarterly Alabama economic forecast update.

Economic Outlook Update:

Alabama Business | October 2023

➢ The state’s economy is expected to grow by about 1.4 percent in 2023 with employment increasing by 1.7 percent
(quarterly estimated for the states GDP were not available at the time of these forecast).

➢ The State gained 1,900 jobs in August over the previous month, bringing the total net gain in jobs to 438,100 from
August 2022 to August 2023, while the seasonally adjusted unemployment rate dropped from 2.6 percent in August
2022 to 2.1 percent in August 2023.

➢ During the same period, seasonally adjusted number of unemployed workers dropped from 60,200 to 48,605.

➢ Year to date, total tax revenues increased by 3.2 percent in September 2023 to approximately $16.6 billion during the
fiscal year 2022-2023. For the same period sales tax receipts rose 3.9 percent to $3.3 billion while individual income
tax revenues increased 0.2 percent, totaling approximately $6.8 billion. Total tax revenues are forecasted to increase by
about 1.5 percent for the FY2023-2024, slower than the increase seen in recent years.

➢ For the first eight months of 2023, Alabama’s exports totaled about $17.9 billion, up almost a $1.0 billion from the
first eight months of the previous year, a 5.9 percent increase. For the same eight month period, transportation
equipment remained state’s largest export, increasing from $7.3 billion in 2022 to $9.3 billion in 2023. Imports
dropped from approximately $24.8 billion in 2022 to $24.2 billion in 2023 (YTD August 2022 to 2023).
Germany became the largest destination for Alabama exports, totaling $3.1 billion in first 8-months of 2023, followed
by Canada ($2.6 billion), China ($2.4 billion), Mexico ($2.1 billion) and South Korea ($862 million).

➢ U.S. economy grew by 2.1 percent during second quarter 2023, just down slightly from 2.2 percent increase seen in the
first quarter. The increase in the second quarter first quarter was primarily due to increase in non-residential fixed
investment (5.2 percent), consumer spending (0.8 percent), and state and local government spending (4.7percent). It
was offset by a decline in exports (-9.3 percent) and imports (-7.6 percent). U.S. economy is expected to increase by 2.7
percent in the second half of the year for an annualized growth of 2.3percent.

➢ Although Federal Reserve did not make any changes to the funds rate in September, there is a strong chance they will
most likely hike the rates in November to about 5.5% -5.75% range. U.S. inflation rate, as measured by consumer
price index (CPI) is expected to be around 2.7 percent in the second half of the year for an annualized rate of 4.1
percent in 2023.

➢ Despite rising interest rates, slowing residential and nonresidential investments, the employers continues to add to their
payrolls, U.S. added approximately 1.6 million jobs during the first five months of the year, most of the jobs being
added were in professional and business services, healthcare services, leisure and hospitality and government sectors.

➢ U.S. payrolls data continues to show resilience, surging by 336,000 in September while the unemployment rate was
unchanged at 3.8 percent. The job gains were primarily in leisure and hospitality (96,000), government (73,000),
healthcare (41,000), and professional and business services (29,000). All remaining sectors saw very little change in
payroll levels. Overall employment is expected to increase by about 1.0 percent in the second half of the year, with an
annualized growth 0f 2.2 percent

➢ Consumer spending will grow by 2.5 percent in 2023 and 1.5 percent in 2024. Overall business spending will rise
only 3.1 percent in 2023 and 3.1 2024, while residential investments will decline 10.7 percent in 2023 and will most
likely show an increase of 1.0 percent in 2024, after showing a consistent decline for last nine quarters.

Quarterly Report

First Quarter 2023
Second Quarter 2023
Third Quarter 2023