Established in 1930, each issue contains a free quarterly Alabama economic forecast update.
Economic Outlook Update:
➢ Alabama’s economy grew by 4.1 percent in 2021, following a 3.2 percent drop in 2020. For 2022, the state’s economy is estimated to increase by about 2.7 percent.
➢ The State gained 3,800 jobs in March over the previous month, bringing the total net gain of jobs to 40,100 from March 2021 to March 2022, while the seasonally adjusted unemployment rate dropped from 3.7 percent in March 2021 to 2.9 percent in March 2022.
➢ The seasonally adjusted number of unemployed workers, based on a household survey, dropped from 82,443 in March 2021 to 65,485 in March 2022.
➢ Alabama export rose from $17.2 billion in 2020 to $20.9 billion in 2021. Transportation equipment remained the state’s largest export, totaling $10.4 billion in 2021. Germany remained the largest destination for Alabama exports; exports to Germany totaled $3.7, followed by Canada ($3.4 billion) and China ($3.1 billion).
➢ Total nonfarm employment is forecast to increase by 1.4 percent in 2022, with most of the job gains in motor vehicle manufacturing; wholesale trade; health and personal care stores; general merchandise stores; department stores; real estate, rental and leasing; professional, scientific and technical services; ambulatory healthcare services; accommodation and food services; local government educational services; and other services.
➢ Year to date, total tax revenues have increased by 19.5 percent from October 2021 to April 2022. For the same period, sales tax receipts rose 11.1 percent while income tax revenues rose 25.4 percent, totaling $1.5 billion and $3.2 billion, respectively. Total tax revenues are forecasted to increase by about 12.0 percent for FY2022.
➢ After growing by 6.9 percent in the fourth quarter of 2021, the U.S. economy contracted in the first quarter of 2022. Real GDP declined at an annual rate of 1.4 percent in the first quarter of 2022. The decline was primarily due to a drop in inventory investment (-0.8%), net exports (-3.2%), and government consumption and gross investment (-0.5%). Final sales to private domestic purchasers, an indicator of the underlying strength in overall aggregate demand—grew by 3.7 percent, up from 2.6 percent in the fourth quarter. In comparison, consumer spending rose 2.7 percent compared to the 2.5 percent growth seen in the fourth quarter. Imports, which are subtracted in the estimation of GDP, also increased by 17.7 percent.
➢ Inflation rate, as measured by the consumer prices index, is expected to grow 6.8 percent in 2022, after accelerating to 8.5 percent in March 2022.
➢ Probability of recession in 2022; 35.0 percent.
First & Second Quarter 2022