UA Economists: Alabama’s Economic Growth Projected to Slow while Inflation Expected to Decrease

• April 16th, 2024

Tuscaloosa, Ala – Alabama’s economic growth is projected to slow while inflation is expected to slightly decrease through 2024, according to researchers at The University of Alabama’s Center for Business and Economic Research (CBER).

The state’s economy continued to grow in 2023, without being affected by stubborn inflation, monetary policy rate hikes, lingering labor shortages, and the continued effects of the Ukraine-Russian war, according to CBER.

Alabama’s economic output for 2024 is projected to increase 1.2%, compared to a projected increase of 1.4% for the United States. The projection comes after the state’s economic output grew by 1.9% in 2023, due to high consumer spending and a surge in exports. Nationally, the economic output grew by 2.4% in 2023, driven by pent-up demand and accumulated savings from the pandemic era.

“Most likely Alabama’s growth for 2023 will be revised upwards to slightly over 2.0%,” said Ahmad Ijaz, CBER’s executive director and director of economic forecasting.

Businesses and consumers spent almost $3 trillion in savings during the pandemic, which aided in avoiding a recession and sustain the economy . Economists estimate that approximately $1.0 trillion in accumulated savings are still remaining, and these funds could continue to keep both businesses and consumers buoyed despite high interest rates.

“Strong consumer spending in 2022 and 2023 was driven primarily by pent-up demand and accumulating savings built up during the pandemic era,” Ijaz said.

The Center for Business and Economic Research has produced forecasts of economic activity in Alabama since 1980. The center incorporates data from the last 30 years, including cycles and recoveries captured over the years, into its statistical and economic models. These forecasts cover Alabama’s gross domestic product, employment, and income by industry group and are published in the annual Alabama Economic Outlook, which includes and annual analysis into the national and state economy, including examinations of metro areas in Alabama. Forecast updates are provided quarterly. The 2024 Alabama Economic Outlook, available for free on the center’s website, reports consumer spending should increase by 1.9 percent in 2024 and 1.5% percent in 2025, which could be damped by high levels of consumer debt going forward.

“Alabama’s economy is still growing,” said Ijaz, “and will continue to do so despite recession fears triggered by higher interests rates.”

This year’s outlook includes the effects of population aging on labor force participation and whether Alabama really does have a labor shortage. The feature article highlights the need for economic stakeholders to incorporate a demographic perspective to improve the status of labor force participation in Alabama.

“There are clear patterns of population aging in Alabama that also shape the supply of the labor market,” said Dr. Nyesha Black, the director of demographics at CBER. “There are also significant shifts in the economic behaviors of younger male workers that are exerting a negative effect on Alabama’s overall labor force participation rate. In fact, Alabama’s labor force participation rates would be worse if it were not for the increased labor market engagement of women and workers who are 55 years and older.”

Mildly Confident Expansionary Forecast for Q2 2024

• April 16th, 2024

Reports for the Q2 2024 Alabama Business Confidence Index Now Available

The Alabama Business Confidence Index (ABCI) grew by 4.8 points to reach a mildly confident expansionary index of 54.1 in the Q2 2024 survey. All six component indexes saw increases from their Q1 2024 levels, though the magnitude varied from fairly low increase (2.2 points) to a large leap (9.6 points). Business leaders are forecasting second quarter growth with mild to strong confidence for all of the industry component indexes and the Alabama economy. The only negative index for the quarter is the US outlook, which has been contractionary since Q1 2022.

View the ABCI homepage for more details on the specific components of the statewide ABCI forecast which are also broken down by industry and firm size; or view individual metro reports for Birmingham-Hoover, Huntsville, Mobile, Montgomery, and Huntsville. Historical reports are available for download from the ABCI archive.

Entrepreneurship in Alabama at All-Time High

• May 22nd, 2023

TUSCALOOSA, Ala. — Small business entrepreneurship is healthy in Alabama, according to an analysis of websites registered with a popular web hosting platform. 

To better understand the nuances of Alabama’s entrepreneurial ecosystem, Dr. Nyesha Black, director of demographics for The University of Alabama’s Center for Business and Economic Research, partnered with GoDaddy’s Venture Forward research initiative to analyze new data from a recent study and found entrepreneurship is at an all-time high in Alabama. 

In Alabama, Venture Forward estimates that there are over 150,000 online ventures — businesses with GoDaddy-registered domains and active websites. Most of the ventures are microbusinesses with fewer than 10 employees. 

GoDaddy is an internet domain registration and web hosting company, and Venture Forward quantifies the economic impact made by entrepreneurs by providing insight into their needs, demographics, challenges and behaviors. 

“Technology reduces the barrier of entry into entrepreneurship in the digital space,” Black said. “It became increasingly important for me to quantify the impact these entrepreneurs have on Alabama’s communities and economy. Through our partnership with Venture Forward by GoDaddy, I hope to attract the attention of local decision-makers willing to act and support these entrepreneurs and further the case to increase broadband access and speed across the state.” 

Since the onset of COVID-19, new businesses started at an increased rate across the country. Venture Forward research finds the same phenomenon in Alabama. Key findings from the study include:  

• About one out of 10 microbusinesses want to grow into a corporation with a large employee base or a billion-dollar-valued company.  
• Gen Z and Millennial entrepreneurship rates nearly doubled when compared to pre-pandemic rates from 23% at the start of 2020 to 43% in 2023.  
• Among this new class of entrepreneurs in Alabama, Black entrepreneurs lead the charge as a fast-growing demographic across the state, currently at 30% of all Alabama online microbusinesses as of January 2023. 
• When asked about the rationale behind launching their business, Alabama respondents’ top three answers were to support a cause or hobby, be their own boss, and make extra money. 

“Studying Alabama’s online microbusiness we were able to uncover new insights about these local entrepreneurs,” said Alexandra Rosen, senior director of Venture Forward. “The strong growth in numbers statewide, including the increasing diversity of business owners and the unique agility to launch an online venture with less than $5,000, stood out when analyzing Alabama’s economy.” 

To learn more about Venture Forward’s partnership with The University of Alabama and Dr. Black and to view the full results of the Alabama survey, please visit the Venture Forward site. 

•  Business & Economics, Culverhouse College of Business, Research

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.

CBER’s Socioeconomic Analyst has been Elected to SDC Steering Committee

• March 22nd, 2023

We are excited to announce that CBER’s Socioeconomic Analyst, Susannah Robichaux, has been elected to the State Data Center (SDC) Steering Committee!

The SDC program is one of the Census Bureau’s longest and most successful partnerships. This partnership between the 50 states, the District of Columbia, Puerto Rico, the island areas, and the Census Bureau was created in 1978 to make data available locally to the public through a network of state agencies, universities, libraries, and regional and local governments. CBER has been the lead agency for the Alabama State Data Center (ASDC) since its inception in 1978.

The SDC Steering Committee consists of nine members, elected to represent the 56 states and territories in the State Data Center Program. These members advise the Census Bureau on the administration of the SDC Program; assist the Census Bureau with its surveys and programs; work with the Census Bureau to plan and conduct the Annual Training Conference; and help to improve the flow of information and ideas among member agencies and between member agencies and the Census Bureau.

Congratulations, Susannah!

Culverhouse Associate Dean Appointed to Branch of Atlanta Federal Board

• March 15th, 2023

Dr. Samuel Addy, associate dean for economic development outreach in the Culverhouse College of Business and senior research economist for the Center for Business and Economic Research, was appointed to fill out the remaining year of term on the board of directors of the Birmingham Branch of the Federal Reserve Bank of Atlanta.

“A key focus of our outreach efforts within the Culverhouse College of Business are those that make a positive impact on society and the greater community, and many of those efforts are led by Dr. Addy,” said Culverhouse Dean Kay Palan. “Dr. Addy’s appointment to the board is reflective of the important work he does here, and I look forward to the results of his contributions.”

Going forward, Addy will be eligible for two, three-year appointments on the seven-member Birmingham board.

“This is a win-win situation for the College of Culverhouse and UA,” Addy said. “This role will allow the opportunity to enhance and expand the positive impact our economic outreach at UA has on the state and beyond.”

The Federal Reserve System is overseen by a national Board of Governors who work with the 12 Federal Reserve Banks across the country that have a board of directors, and most have branch banks with individual boards of directors.

Directors provide a link between the system and the public, and their insights help to inform national monetary policy. In addition, directors perform an important corporate governance function for their respective reserve banks. They are expected to contribute to the Fed’s understanding of the economic conditions of their district and the effect of those conditions on the economy. Directors should be familiar with the economic and business community of their region.

Addy has worked with the Atlanta Fed and its Birmingham branch over the years, providing economic data and forecasting as well as information on workforce and business surveys from CBER.

The Atlanta bank’s focus on rural economic development within the six Southeastern states in its district will be an area Addy hopes to learn from and contribute to by relying on UA’s deep ties to the area.

“The breadth of what we do here at UA regarding economic development, particularly in rural areas, is highly visible, and I believe that is a big reason why I was appointed,” he said.

Addy has served in his current roles since 2015, but was previously associate dean for research and outreach from 2011 through 2015, the executive director of the Center for Business and Economic Research from 2007 to 2015, and has held various other leadership roles at the university since 1998.

He is a member of the Alabama Economics Club, University Conflict of Interest Committee at the University of Alabama, International Association for Energy Economists and the American Economic Association.

He earned his doctorate in mineral economics from Pennsylvania State University, his master’s degree in mineral engineering from the University of Minnesota, and a bachelor’s degree in metallurgical engineering from the University of Science and Technology in Kumasi, Ghana.

•  Awards & Honors, Culverhouse College of Business, Faculty & Staff

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.

CBER’s Director of Socioeconomic Analysis & Demographics to Present at Auburn Outreach Retreat Experience

• March 8th, 2023

CBER’s Director of Socioeconomic Analysis and Demographics, Dr. Nyesha Black, will be a presenter at the Auburn University Outreach Retreat Experience on March 22, 2023. Dr. Black will provide an overview of Alabama’s historical demographics and share her projections for what the future might hold for Alabama’s populations.

You can read more about Dr. Black’s analysis of microbusinesses and digital entrepreneurship in Alabama in the 2023 Alabama Outlook or in her 2020 presentation at the Booker T. Washington Summit. If you are interested in having Dr. Black speak at your conference, meeting, or other event, please do not hesitate to reach out to her at ncblack@cba.ua.edu.

Negative Business Confidence in Q1 2023 ABCI

• February 6th, 2023

Business confidence throughout the state remained mildly negative in the Q1 2023 Alabama Business Confidence Index (ABCI) survey. With over 60 percent of panelists forecasting worse conditions, the outlook for the US economy was the lowest for the quarter at 34.4. This quarter, the indexes for all of the industry categories fell: industry profits and capital expenditures are expected to decrease with mild confidence while sales are forecast to continue at the same rate as last quarter. Industry hiring was the only positive index for Q1 2023 with a mildly positive index of 53.6, with 34 percent of panelists anticipating an increase in their hiring compared to Q4 2022.

CBER’s forecasters expect very mild growth in 2023. The rebound of Alabama GDP is slowing, with only a 0.1-percent increase expected this year, and employment in the state is forecasted to remain somewhat stable and only decrease by 0.3 percent. Despite that, CBER anticipates significant growth in the Alabama tax receipts due to strong consumer spending.

The ABCIs for Alabama’s metro areas are all below 50 this quarter, but level of confidence in those forecasts varied. Huntsville had the highest ABCI at a mildly negative 47.9, followed closely by Mobile at 47.0. Both metros had moderately confident hiring indexes, which set them apart from the other metros. Tuscaloosa had an ABCI of 45.6, with neutral expectations for sales and hiring. Birmingham-Hoover and Montgomery had the lowest ABCIs of 43.5 and 42.9, respectively. The indexes in these metros were all mildly to strongly negative, with the exception of Montgomery’s mildly positive hiring forecast.

Panelists in professional, scientific, and technical services had the highest industry index at a moderately positive 55.9, with strongly confident expectations for increased sales and hiring compared to the previous quarter. Business leaders in construction are also forecasting increased hiring and sales, though with milder confidence, leading them to be the only other group to have a positive industry index at 52.5. Five of the nine industry groups still have positive expectations for hiring in Q1 2023, but most industries are forecasting decreased profits and capital spending compared to their Q4 2022 levels.

All three firm size groupings had negative ABCIs in the Q1 2023 survey. Midsize firms, those with 20 to 99 employees, had the lowest ABCI at a moderately negative 42.7, while the ABCIs for small firms, those with up to 19 employees, and large firms, those with 100 or more employees, were only mildly negative. This is the third consecutive quarter that the midsize firms have had a lower ABCI than their counterparts. Midsize firms had the lowest values for all of the component indexes in the Q1 2023 survey except hiring, where their moderately positive index of 55.1 was the most confident of all the groupings’ forecasts.

The ABCI is an initiative of the Center for Business and Economic Research located in the Culverhouse College of Business, The University of Alabama. This makes 85 consecutive quarters that the Center for Business and Economic Research in UA’s Culverhouse College of Business has measured sentiment about the economy and industry prospects in the state. Be sure to do your part by contributing to this unique forecasting tool in the Q2 2023 survey on March 1-17. You can view past and current reports by clicking on the buttons above or following this link: https://cber.culverhouse.ua.edu/alabama-business-confidence-index/.

Free 2022 ASDC Fall Data Conference

• October 10th, 2022

The Alabama State Data Center (ASDC), housed in the University of Alabama’s Center for Business and Economic Research (CBER) hosted a Census data conference this fall on Wednesday, November 9, 2022 from 8:30am to 1:00pm CST. The virtual conference included presentations on the latest updates from Data.Census.gov; the Public Use Microdata Sample (PUMS); how to access PUMS data and make custom tables using the Census Bureau’s MDAT tool; an update on the urban and rural classification; and an overview of local geographic news. The speakers came from the Census headquarters as well as from the regional office in Atlanta.

Click on the red, bold titles below to view the slides for the presentations. For recordings of the webinars, reach out to Susannah Robichaux, CBER socioeconomic analyst and lead for the ASDC, at scrobichaux@ua.edu.

Alabama State Data Center Fall 2022 Conference
Wednesday, November 9, 2022: 8:30am – 1:00pm

Welcome and Introductions | Susannah Robichaux, ASDC Lead / Socioeconomic Analyst, The University of Alabama’s Center for Business and Economic Research; and Devon Reed, Customer Liaison and Marketing Services Office, Data Users Branch, U.S. Census Bureau.

Data.Census.Gov Updates| Kanin Reese, Chief, Dissemination Outreach Branch – Center for Enterprise Dissemination, U.S. Census Bureau. Data.census.gov is the Census Bureau’s primary data search tool. This new platform allows users to spend less time searching for data and content by accessing available data from one centralized place. Since the platform is driven by user feedback, enhancements and upgrades to the tool are being implemented regularly. This webinar featured a how-to training for the tool, an overview if it’s latest functions, and upcoming enhancements and data releases.

Public Use Microdata Sample (PUMS)| Monica Dukes, Alabama Data Dissemination Specialist, Data Dissemination and Training Branch, U.S. Census Bureau. Are you a data user that can’t find what you are looking for in the pre tabulated ACS data products? Then the Public Use Microdata Sample (PUMS) may be what you are looking for. The PUMS files are a set of untabulated records about individual people or housing units, which allow data users to create custom estimates and tables free of charge. This presentation provided an overview of PUMS files and their usage.

Microdata Access Tool (MDAT)| Kanin Reese, U.S. Census Bureau. The Microdata Access Tool (MDAT), available through data.census.gov, allows users to create custom tabulations with various available Public Use Microdata sets and vintages. This webinar covered the basics of using the MDAT tool, including how to access microdata, and a demonstration on how to access data, and create custom tabulations, for topics like sex, age, race and ethnicity, income and poverty, and more.

Urban and Rural Classification and Criteria | B. Rush White, Geographer, Geography Division, U.S. Census Bureau. This webinar offered a review of the 2010 Urban and Rural classifications as well as the 2020 criteria by discussing changes in approaches to interpreting and understanding the growth of urban areas, improved technology making it easier to manage large amounts of data, and increased spatial resolution of statistical and geospatial data.

Geographic Partnership Updates | William Curry, Geographer, Atlanta Regional Census Center/Field Division, U.S. Census Bureau. *No slides were used.* This presentation touched on the various geographic updates using these helpful flyers: Count Question Resolution Program, 2020 Post Census Group Quarters Review, and 2023 Boundary and Annexation Survey.

U.S. Inflation Rate

• June 13th, 2022

U.S. inflation rate, as measured by consumer price index rose by 1.0 percent in May, as the year-over-year change accelerated to 8.6 percent, the highest level since December 1981. Price increases were mainly driven by shelter, gasoline and food.  Core CPI, which excludes food and energy rose 0.6 percent in May for an annual rate of 6.0 percent.

For a complete report go to:  https://www.bls.gov/news.release/pdf/cpi.pdf

U.S. Economy Posts Solid Jobs Growth in May

• June 6th, 2022

Total nonfarm payroll employment rose by 390,000 in May, according to the U.S. Bureau of Labor Statistics. Notable job gains occurred in leisure and hospitality (84,000), but still down by 1.3 million or 7.9 percent from February 2020; professional and business services (75,000), higher by 821,000 than in February 2020; transportation and warehousing (47,000); construction (36,000); healthcare (28,000); and manufacturing (28,000). Employment in retail trade was down by 61,000 in May.

In May, the unemployment rate was 3.6 percent for the third month in a row, and the number of unemployed persons was unchanged at 6.0 million. Prior to the COVID-19 pandemic in February 2020, the unemployment rate was 3.5 percent with 5.7 million unemployed.

For a complete report go to: https://www.bls.gov/news.release/pdf/empsit.pdf