Alabama Business™
Established in 1930, each issue contains a free quarterly Alabama economic forecast update.
Economic Outlook Update:
Alabama Business | May 2024
- Following a 0.6 percent growth in the first half of 2023, Alabama’s economy, as measured by its inflation adjusted Gross Domestic Product (GDP), rose 4.1 percent and 4.8 percent in the third and fourth quarters respectively, for all of 2023, Alabama’s economy grew by 2.5 percent totaling $241.8 billion, with employment growing at 1.8 percent. For 2024, the state’s GDP will increase by about 2.0 percent while employment is forecasted to increase by 1.5 percent.
- The State gained 5,300 jobs in March over the previous month, bringing the total net gain in jobs to 38,900 from March 2023 to March 2024, while the seasonally adjusted unemployment rate was at 3.0 percent.
- During the same period, seasonally adjusted number of unemployed workers rose from 52,332 to 70,894 and the labor force participation rate went up from 57.0 percent in March 2023 to 57.4 percent in March 2024.
- Year to date, total tax revenues increased by 2.4 percent in April 2024 to approximately $10.0 billion during the first seven months of the current fiscal year. For the same period sales tax receipts declined 4.4 percent to about $1.9 billion while individual income tax revenues went up 0.8 percent, totaling approximately $3.9 billion. Total tax revenues are forecasted to increase by about 1.7 percent for the FY2023-2024.
- For the first three months of the year, Alabama exports totaled $6.5 billion, up from $6.3 billion for the same period during previous year, a 3.7 percent increase. Transportation equipment remained state’s largest export, increasing from approximately $3.0 billion during first three months in 2023 to $3.2 billion for the same period in 2024. Germany remained the largest destination for Alabama exports, totaling $1.1 billion for the first 3 months of 2024, compared to $959 million for the same period in 2023, followed by Canada ($1.0 billion), Mexico ($907 million) and China ($904 million).
- For the first three months of the year, Alabama imports totaled $9.6 billion, up from $8.7 billion for the same period during previous year, a 10.1 percent increase. Imports from Mexico totaled $1.87 billion for the first 3 months of 2024, compared to $1.9 billion for the same period in 2023, followed by South Korea ($1.6 billion), Germany ($1.4 billion) and China ($1.0 billion). Transportation equipment was the largest import ($3.4 billion), followed by nonelectrical machinery ($916 million), electrical equipment and appliances ($886 million), and computers and electronic products ($781 million).
- The US economy grew less than expected for the first quarter of 2024, at an annualized rate of 1.6 percent, compared to the 3.4 percent rate seen in the previous quarter. The increase in the first quarter was primarily due to increase in consumer spending (2.5 percent), mainly services; residential fixed investment (13.9 percent); state and local government spending (2.0 percent); and business spending (5.3 percent). Increase in imports by 7.2 percent subtracted from the economic growth. U.S. economy is expected to grow by 2.5 percent in 2024 and 1.6 percent in 2025.
- U.S. inflation rate, as measured by consumer price index (CPI) rose by an annualized 3.8 percent in the first quarter, up from 2.7 percent in the fourth quarter 2023. Forecast for inflation rate calls for a 3.3 percent increase in 2024.
- The US economy added 175,000 jobs in April, well below expectations and the smallest increase in six months, as the labor market shows some signs of cooling while the unemployment rose slightly to 3.9 percent. Revisions to data for February and March showed that 22,000 fewer jobs were created than previously reported. The slowdown in job growth was primarily seen in leisure and hospitality, construction, and the government sector, while employment remained strong in healthcare and retail.
- Consumer spending will grow by 2.7 percent in 2024 and 1.9 percent in 2025. Overall business spending will increase by 2.9 percent in 2024 followed by 2.4 percent in 2025, while residential investments will rise by 3.5 percent in 2024 and 0.3 percent in 2025. Residential investments, which include both home construction and sales increased for the first time during the second half of 2023, after nine straight quarterly declines.
