Center for Business and Economic Research. 2 Not Seasonally Adjusted Seasonally Adjusted Civilian...

2015 ECONOMIC OUTLOOK CONFERENCE

2015 AlabamaEconomic Outlook

Center for Business and Economic Research

2015 ECONOMIC OUTLOOK CONFERENCE 2

Monthly Employment Indicators (November 2014)

Not Seasonally Adjusted

Seasonally Adjusted

Civilian Labor Force 2,108,602 2,109,059 Percent Change from Year Ago Level -0.7% -0.4% Absolute Change from Year Ago Level -14,711 -8,566

Employed 1,993,206 1,983,170 Percent Change from Year Ago Level -0.4% -0.1% Absolute Change from Year Ago Level -7,870 -2,616

Unemployed 115,396 125,889 Percent Change from Year Ago Level -5.6% -4.5% Absolute Change from Year Ago Level -6,841 -5,950

Alabama Unemployment Rate 5.5% 6.0%Alabama Unemployment Rate (Nov. 2013) 5.8% 6.2%U.S. Unemployment Rate 5.5% 5.8%U.S. Unemployment Rate (Nov. 2013) 6.6% 7.0%

Source: Alabama Department of Labor, Labor Market Information Division.


Alabama Nonagricultural EmploymentChange in Number of Jobs


November 2012 to November 2013

November 2013 to November 2014

Total Nonagricultural 15,900 33,700 Natural Resources and Mining -500 100 Construction -2,400 4,700 Manufacturing 4,200 7,400 Durable Goods Manufacturing 3,700 6,400 Nondurable Goods Manufacturing 500 1,000 Trade, Transportation and Utilities 3,400 -1,800 Wholesale Trade 1,700 -1,100 Retail Trade 600 -1,300 Transportation, Warehousing and Utilities 1,100 600 Information 0 0 Financial Activities 1,000 -1,700 Professional and Business Services -500 11,100 Educational and Health Services 4,000 2,000 Leisure and Hospitality 8,300 8,900 Other Services -200 1,700 Government -1,400 1,300 Federal Government -2,000 -800 State Government 1,900 1,400 Local Government -1,300 700


Alabama Jobs Scorecard


January 2011

November 2014

Change

Total Nonagricultural 1,839,400 1,954,400 115,000 Natural Resources and Mining 12,100 12,200 100 Construction 77,200 82,300 5,100 Manufacturing 233,200 258,000 24,800 Durable Goods Manufacturing 143,500 166,700 23,200 Nondurable Goods Manufacturing 89,700 91,300 1,600 Trade, Transportation and Utilities 358,800 376,500 17,700 Wholesale Trade 70,900 73,500 2,600 Retail Trade 221,500 231,300 9,800 Transportation, Warehousing and Utilities 66,400 71,700 5,300 Information 23,500 22,400 -1,100 Financial Activities 91,100 93,300 2,200 Professional and Business Services 208,200 230,400 22,200 Educational and Health Services 213,200 227,600 14,400 Leisure and Hospitality 159,500 189,900 30,400 Other Services 78,400 80,800 2,400 Government 384,200 381,000 -3,200 Federal Government 57,200 53,000 -4,200 State Government 110,400 112,400 2,000 Local Government 216,600 215,600 -1,000


1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

1,500

1,600

1,700

1,800

1,900

2,000

2,100

0

2

4

6

8

10

12

Total Annual Nonfarm Employmentand Unemployment Rate

Employment (Thousands), Unemployment Rate (Percent), 1990-2014

Source: Alabama Department of Labor.

Non

farm

Em

ploy

men

t

Une

mpl

oym

ent

Rat

e


90

92

94

96

98

100

10219801981199020012007

Change in Alabama Employment From the Beginning of the Recession

Number of months


Labor Force Participation Rate (Annual)

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

55

57

59

61

63

65

67

69

United States

Alabama

Source: Bureau of Labor Statistics.


Shares of nonfarm employment (2013) andAlabama Gross Domestic Product (2013) by industry

1 20%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

17.7713.09

6.9111.81

9.18 11.49

7.4011.652.86

9.4316.80

19.85

39.08

22.69

All Other

Government

Leisure and Hospital-ity

Education and Healthcare Service

Professional and Business Services

Retail Trade

Manufacturing

Share of Alabama GDP Share of Alabama Non-farm Employment

Source: Bureau of Economic Analysis, Bureau of Labor Statistics.


• 4th in U.S. in vehicle exports

• 4 OEMs in the state (Original Equipment Manufacturers)

• 5th in U.S. in vehicles manufactured

• Alabama’s three assembly plants produced 918,172 vehicles in 2013 and the number is expected to climb in the coming years

• $6.5 billion in vehicles shipped to 99 countries in 2013

• Since 2011, Alabama has attracted more than 200 auto-related projects involving $4 billion in investment and 17,000 new jobs

Source: Economic Development Partnership of Alabama (EDPA) and Alabama Department of Commerce.

Manufacturing – Automotive Industry


U.S. Alabama$0

$1,000

$2,000

$3,000

$4,000

$5,000 $4,997

$3,991

$817

$1,731

$631 $517$236 $301

$121 $286

All Merchandise

Transportation Equipment

Chemicals

Primary Metal Manufacturing

Minerals and Ores

Source: International Trade Administration, U.S. Department of Commerce and U.S. Census Bureau.

2013 Exports Per Capita


Bioscience Industry Employment in Alabama, 2012

11

Drugs & pharmaceu-ticals, 10% (1,284)

Ag. feedstock & chemicals, 13%

(1,651)

Med. devices & equip., 13%

(1,662)

Research, testing & med. labs, 30% (3,844)

Bioscience-re-lated distribu-

tion, 34% (4,353)

Note: Number of employees in parenthesis.Source: U.S. Bureau of Labor Statistics data from Batelle/BIO report.


Alabama Average Annual Wage, 2012

12

All private sector industries

Bioscience industries average

Research, test. & med. labs

Medical devices & equip.

Bioscience-related distr.

Ag. feedstock & chemicals

Drugs & pharmaceuticals

$0 $40,000 $80,000

$41,074

$65,727

$46,939

$55,958

$66,255

$72,338

$73,583

Source: U.S. Bureau of Labor Statistics data from Batelle/BIO report.


Tax Revenues (FY2015, Year-to-Date November 2014)

Percent Change From

Year Ago

Change in Revenue from Year Ago Level

Tax Total Collection

Total $1,558,742,224 9.1% $129,308,953

Income (Individual) $587,479,221 8.4% $45,681,846

Sales $347,809,038 2.6% $8,719,665

Source: Alabama Department of Revenue.


20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

2016-6

-4

-2

0

2

4

6Annual Percent Change

Source: U.S. Bureau of Economic Analysis, Alabama Department of Labor, and Center for Business and Economic Research, The University of Alabama.

AlabamaGDP

NonfarmEmployment

Alabama GDP and Nonfarm Employment


20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

2016-20

-15

-10

-5

0

5

10Annual Percent Change

Total Nondurable Goods Durable Goods

Source: Alabama Department of Labor and Center for Business and Economic Research, The University of Alabama

Alabama Manufacturing Employment


This Alabama GDP and employment forecast summary is the CBER December 2014 forecast

Preliminary 2015 forecast also included below

Alabama Forecast Summary

Probability: Forecast (60 Percent) and Range (90 percent)

(Percent change) 2012 2013 2014 2015

Real GDP 2.3 2.0 2.0 2.3

range 1.0 to 2.5 2.0 to 3.5

Employment 0.8 1.0 0.7 1.8

range 0.3 to 1.7 0.8 to 2.0

Total Tax Receipts, FY 3.8 4.0 1.3 2.4

range 1.5 to 4.0


ABCITM

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q10

10

20

30

40

50

60

70

80

90

100

45.4 47.752.9 51.9 51.2

55.6 55.5 54.2 57.4

2013 2014 2015

Inde

x


U.S. and Alabama EconomiesExpectations versus Prior Quarter

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q135

40

45

50

55

60

Alabama

UnitedStates

57.4 56.4

2012 2013 2014 2015


Sales and ProfitsExpectations versus Prior Quarter

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q140

45

50

55

60

65

Sales

Profits

60.6

57.8

2012 2013 2014 2015


Hiring and Capital ExpendituresExpectations versus Prior Quarter

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q142

44

46

48

50

52

54

56

58

Hiring

Capital Expenditures

56.3 55.9

2012 2013 2014 2015


ABCITM History

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

30

35

40

45

50

55

60

65

70

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


Alabama GDP and employment by metro areas, 2013

Source: Alabama Department of Labor and U.S. Bureau for Economic Analysis.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1.99 2.432.20 3.03

31.12 26.65

2.662.85

2.452.98

2.262.91

1.411.92

11.45 11.22

8.85 9.09

8.14 8.84

5.16 5.07

22.31 23.02Non-Metro Areas

Tuscaloosa

Montgomery

Mobile

Huntsville

Gadsden

Florence-Muscle Shoals

Dothan

Decatur

Birmingham-Hoover

Auburn-Opelika

Anniston-Oxford-Jacksonville

GDP Employment


Gross Domestic ProductAll Industry Total(Millions of chained 2009 dollars)

Percent Change2004 to2012 to

2013 2013 2013Alabama 180,727 7.5 0.8Anniston-Oxford 3,518 -3.1-3.0Auburn-Opelika4,293 28.9 3.4Birmingham-Hoover 55,913 3.0 -0.8Daphne-Fairhope-Foley 5,909 23.3 4.1Decatur5,063 0.5 0.6Dothan 4,583 -1.41.7Florence-Muscle Shoals4,255 12.1 3.9Gadsden 2,518 -5.0-3.1Huntsville 21,645 21.9 0.6Mobile 17,085 18.2 2.9Montgomery 15,489 1.2 0.3Tuscaloosa 9,437 20.5 0.4

Source: U.S. Bureau of Economic Analysis. 23


Metropolitan Areas, Exports in 2013Total Merchandise

Metro Area ExportsAlabama $19.3 billionAnniston-Oxford $192.7 millionAuburn-Opelika $395.4 millionBirmingham-Hoover $1.9 billionDaphne-Fairhope-Foley $515.3 millionDecatur $673.1 millionDothan $374.7 millionFlorence-Muscle Shoals $229.7 millionGadsden $54.6 millionHuntsville $1.5 billionMobile $1.5 billionMontgomery $1.7 billionTuscaloosa NA

Source: International Trade Administration, U.S. Department of Commerce.


Metro Percent of State Exports2013 2012

Alabama 100.0 100.0Anniston-Oxford 1.1 1.2Auburn-Opelika 2.4 2.6Birmingham-Hoover 11.1 11.4Daphne-Fairhope-Foley 3.1 NADecatur 4.0 3.8Dothan 2.2 1.6Florence-Muscle Shoals 1.4 0.8Gadsden 0.3 0.2Huntsville 9.0 8.8Mobile 9.2 11.2Montgomery 9.9 10.4Tuscaloosa NA NA

Source: International Trade Administration, U.S. Department of Commerce.


Unemployment RateUnited States

Alabama

Anniston-Oxford

Auburn-Opelika

Birmingham-Hoover

Daphne-Fairhope-Foley

Decatur

Dothan

Florence-Muscle Shoals

Gadsden

Huntsville

Mobile

Montgomery

Tuscaloosa

5.5

5.8

6.5

4.6

5.2

5.2

5.8

5.9

6.4

5.7

5.1

6.7

6.1

5.4

7.06.3

7.54.8

5.5

5.7

6.1

6.1

6.1

6.2

5.5

7.2

6.5

5.8

October 2013October 2014

Source: Alabama Department of Labor.


Median Family Income FY2014United States

AlabamaAnniston-OxfordAuburn-Opelika

Birmingham-HooverDaphne-Fairhope-Foley

DecaturDothan

Florence-Muscle ShoalsGadsden

HuntsvilleMobile

MontgomeryTuscaloosa

$63,900$54,100

$51,600$59,700$61,000

$68,800$53,500

$51,700$52,100

$46,900$69,700

$53,900$59,600

$54,400

Note: Chilton and Walker counties are not included in the estimate for the Birmingham- Hoover metro, Henry County is not included in the Dothan, and Pickens County in the Tuscaloosa metro estimate. Source: U.S. Department of Housing and Urban Development, Office of Economic Affairs, Economic and Market Analysis Division.


Educational Attainment 2013United States

AlabamaAnniston-OxfordAuburn-Opelika

Birmingham-HooverDaphne-Fairhope-Foley

DecaturDothan

Florence-Muscle ShoalsGadsden

HuntsvilleMobile

MontgomeryTuscaloosa

86.684.5

80.389.5

87.090.6

80.884.183.4

81.988.8

85.885.786.7

29.6 23.5

15.0 37.9

28.6 29.0

18.9 18.3

17.0 16.2

36.5 22.3

25.9 24.7

Bachelor's degree or higher, Percent High school or higher, Percent

Source: U.S. Census Bureau, 2013 American Community Survey 1-year estimates.


Population gains varied widely since 20107/1/2010 to 7/1/2013

Number Percent7/1/2013 Change Change

Alabama 4,833,722 48,152 1.0Anniston-Oxford 116,736 -1,712 -1.4Auburn-Opelika 150,933 10,083 7.2Birmingham-Hoover 1,140,300 11,204 1.0Daphne-Fairhope-Foley 195,540 12,317 6.7Decatur 153,374 -488 -0.3Dothan 147,691 1,815 1.2Florence-Muscle Shoals 147,317 88 0.1Gadsden 103,931 -567 -0.5Huntsville 435,737 16,306 3.9Mobile 414,079 789 0.2Montgomery 373,510 -1,698 -0.5Tuscaloosa 235,628 5,154 2.2

Source: U.S. Census Bureau.


Seven metros past 2007/2008 annual peak in November 2014

* Gadsden, Huntsville and Mobile employment peaked in 2008; all others saw peaks in 2007.Note: Nonfarm employment (jobs) is by place of work.Source: Alabama Department of Industrial Relations and U.S. Bureau of Labor Statistics.

2007 or 2008 Job Loss to 2014Nonfarm Employment Peak Year Number PercentAlabama 2,005,700 51,300 2.56%Anniston-Oxford 53,400 7,900 14.79%Auburn-Opelika 54,800 -6,100 -11.13%Birmingham-Hoover 533,400 17,300 3.24%Decatur 58,600 4,400 7.51%Dothan 63,100 5,400 8.56%Florence-Muscle Shoals 57,300 -100 -0.17%Gadsden* 38,000 700 1.84%Huntsville* 214,300 -3,900 -1.82%Mobile* 184,600 11,200 6.07%Montgomery 178,000 8,300 4.66%Tuscaloosa 98,500 -3,600 -3.65%Net Jobs in Metropolitan Areas 41,500Net Jobs in Nonmetro Counties 9,800


GDP and Nonfarm Employment Forecasts, 2015Nonfarm Employment Real GDPForecast, Percent Forecast, Percent

Anniston-Oxford 0.3 1.3Auburn-Opelika 2.5 3.7Birmingham-Hoover 1.0 1.5Daphne-Fairhope-Foley 1.2 3.0Decatur 0.4 1.0Dothan 1.4 1.8Florence-Muscle Shoals 1.0 3.5Gadsden 1.1 1.4Huntsville 2.0 3.8Mobile 1.2 3.2Montgomery 0.9 1.4Tuscaloosa 2.2 3.8

Source: U.S. Department of Commerce, Alabama Department of Labor, and Center for Business and Economic Research, The University of Alabama, December 2014.


Top issues that Alabama is facing:

1 Education/Training (Quality of education; workforce development)

2 Government (Federal, state & local government; tax reform; prison reform; state constitution)

3/4 Economy/Businesses (Economic & business growth; small businesses)

3/4 Jobs (Job growth; better paying jobs)

5 Healthcare (Healthcare cost; Affordable Healthcare Act; Medicaid, Medicare)

6 Infrastructure (Infrastructure; roads and bridges)

Source: Center for Business and Economic Research, ABCI Panelists’ Poll, Nov. 2014.

Source: Center for Business and Economic Research, ABCI Panelists’ Poll, Nov. 2014.


Top issues that companies in Alabama are facing:

1 Company Finances & Development

(Profitability; business costs; availability of credit; business growth; competition; concern about customers)

2 Government (Federal, state & local government; taxation; regulations; uncertainty)

3 Workforce (Lack of skilled workers; retaining qualified employees)

4 Economy (Economic recovery & growth; consumer spending)

5 Healthcare (Healthcare cost; Affordable Healthcare Act)

Note: No issues companies are facing was currently mentioned by 1.0% of respondents.Source: Center for Business and Economic Research, ABCI Panelists’ Poll, Nov. 2014.


State Rank of Alabama Per Capita Income1930 441940 45

1950 47

1960 46

1970 47

1980 46

1990 40

2000 43

2009 412010 412011 412012 412013 42

Source: Estimates based on Bureau of Economic Analysis data.

34


Alabama Per Capita Income Share of U.S. Per Capita Income

1929

1930

1931

1932

1933

1934

1935

1936

1937

1938

1939

1940

1941

1942

1943

1944

1945

1946

1947

1948

1949

1950

1951

1952

1953

1954

1955

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

30

40

50

60

70

80

90

(Percent)

1929: U.S. $697 Alabama $318

2013: U.S. $44,543Alabama $36,501


Understanding the economy and economic development

Economy = People + Institutions + Property = Private & Public Sectors

Economic Development = Higher or better quality of life

Human Capital Development = Improved education and healthcare

Institutional Development = Better government, companies, culture

Physical Capital Development = Better infrastructure and environment

There is no economic development without education (a public good)

*** Informal education is also important

Pre-Kindergarten to High School (Pure Public Good)

Universities (Largely Public Good)

Vocational and Community Colleges (Mostly Public Good)

Development Policies must be Optimal = Efficient, Fair, Flexible, Sustainable

36


Labor force participation (2012): Alabama 57.3% United States 63.7%

Educational Attainment (Age 25 and over population)

2008-2012 (2012) Alabama United States

High school graduates 82.6% (84.0%) 85.7% (86.4%)

Bachelor’s or higher degree 22.3% (23.3%) 28.5% (29.1%)

Population Growth Alabama United States

1990-2000 10.1% 13.2%

2000-2010 7.5% 9.7%

2010-2013 1.1% 2.4%

Alabama has lower labor force participation, population growth, and

educational attainment than the nation

37


Thank you andHappy New Year

Center for Business and Economic ResearchCulverhouse College of Commerce

The University of AlabamaBox 870221

Tuscaloosa, Alabama 35487-0221205.348.6191

http://cber.cba.ua.edu

Serving Alabama Since 1930

Center for Business and Economic Research. 2 Not Seasonally Adjusted Seasonally Adjusted Civilian...

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