Download 2013

Alabama State Black Chamber of Commerce
Entrepreneurs and Innovators Conference
June 25, 2015
Ahmad Ijaz
Center for Business and Economic Research
Serving Alabama Since 1930
•
U.S. economic growth declined by 0.2 percent in the first quarter,
following a 2.2 percent growth in the fourth quarter, GDP in the second
quarter is expected increase by 2.1 percent and around 3.0 percent in
the second half.
•
Stronger consumer spending, improving housing market and an end to
the sharp drop in energy sector capital spending will be major drivers.
•
Slowest economic recovery since WWII. Economic growth in the next
few quarters will depend on pace of improvement in labor markets and
a relatively smooth transfer to a tighter monetary policy. The Fed is
expected to start raising interest rate by fourth quarter 2015.
•
Median family income has been flat for two years, in 2013 it was 8%
below 2007. Weakness in wage gains and falling labor force
participation rate will continue to keep consumers cautious about their
spending (lowest participation rate since 1978).
2
•
Despite improving payrolls, there is still considerable slack in the labor
market, a factor hindering wage growth. Much of the job growth in
recent years (30-40 percent) has been in low wage sectors of the
economy or in part-time/temporary employment.
•
Major drag on economic growth will be from net exports because of a
strong dollar and weak growth in much of the rest of the world and lack
of federal government spending.
•
Facing a lack of wage and income growth, consumers are taking on more
debt; household nonmortgage debt increased from $3.1 trillion in 2013
to $3.4 trillion in 2014.
•
Sluggish job growth and high level of college related student debt is also
resulting in low household formation (only about 0.5 million in late 2013
and early 2014).
3
1.5
1
0.5
0
-0.5
-1
-1.5
-2
-2.5
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
2008
2009
2010
2011
2012
2013
2014
2015
Source: Bureau of Economic Analysis, Bureau of Labor Statistics, and IHS Global Insight.
4
10
5
0
-5
-10
-15
Manufacturing
Construction
Leisure & Hospitality
Financial Activity
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-20
Source: Bureau of Labor Statistics and IHS Global Insight.
5
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1997
1998
1996
1995
1994
1993
1992
1991
110
100
90
80
70
60
50
Source: University of Michigan and IHS Global Insight.
6
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
8
6
4
-6
State and Local
2
0
-2
-4
Federal
-8
Source: Bureau of Economic Analysis and IHS Global Insight.
7
(Percent change unless otherwise noted)
2012
2013
2014
2015
2016
Real GDP
2.3
2.2
2.4
2.1
3.1
Consumption
1.8
2.4
2.5
2.8
2.9
13.5
11.9
1.6
8.3
12.9
Commercial, Healthcare Structures
8.5
3.4
7.7
9.9
13.8
Nonresidential Fixed Investment
7.2
3.0
6.3
3.4
6.6
Federal Government
-1.8
-5.7
-1.9
0.5
0.2
State & Local Government
-1.2
0.5
1.0
1.0
1.1
Exports
3.3
3.0
3.2
1.6
4.9
Imports
2.3
1.1
4.0
5.5
6.4
Payroll Employment
1.7
1.7
1.9
2.1
1.5
Unemployment Rate
8.1
7.4
6.2
5.4
5.1
CPI Inflation
2.1
1.5
1.6
0.0
1.8
14.43
15.52
16.40
16.99
17.31
Residential Investment
Light Vehicle Sales (Millions)
4
100%
90%
80%
22.69
39.08
All Other
70%
19.85
Government
60%
50%
40%
30%
16.80
9.43
Leisure and
Hospitality
2.86
11.65
Education and
Healthcare Service
11.49
Professional and
Business Services
7.40
9.18
Retail Trade
20%
10%
6.91
11.81
17.77
Manufacturing
13.09
0%
1
Share of Alabama
GDP
2 Employment
Share of Alabama Non-farm
Source: Bureau of Economic Analysis, Bureau of Labor Statistics.
9
Not Seasonally
Adjusted
Seasonally
Adjusted
Civilian Labor Force
Percent Change from Year Ago Level
Absolute Change from Year Ago Level
2,176,934
1.1%
24,702
2,170,900
1.5%
31,152
Employed
Percent Change from Year Ago Level
Absolute Change from Year Ago Level
2,042,837
1.6%
33,022
2,038,731
2.4%
47,488
Unemployed
Percent Change from Year Ago Level
Absolute Change from Year Ago Level
134,097
-5.8%
-8,320
132,169
-11.0%
-16,336
6.2%
6.6%
5.3%
6.1%
6.1%
6.9%
5.5%
6.3%
Alabama Unemployment Rate
Alabama Unemployment Rate (May 2014)
U.S. Unemployment Rate
U.S. Unemployment Rate (May 2014)
Source: Alabama Department of Labor, Labor Market Information Division.
10
Total Nonagricultural
Natural Resources and Mining
Construction
Manufacturing
Durable Goods Manufacturing
Nondurable Goods Manufacturing
Trade, Transportation and Utilities
Wholesale Trade
Retail Trade
Transportation, Warehousing and Utilities
Information
Financial Activities
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Federal Government
State Government
Local Government
January
2011
May 2015
Change
1,839,400
12,100
77,200
233,200
143,500
89,700
358,800
70,900
221,500
66,400
23,500
91,100
208,200
213,200
159,500
78,400
384,200
57,200
110,400
216,600
1,958,100
10,900
81,600
252,700
166,700
86,000
375,800
70,800
230,400
74,600
22,900
96,300
229,700
229,600
194,200
81,100
383,300
53,400
110,900
219,000
118,700
-1,200
4,400
19,500
23,200
-3,700
17,000
-100
8,900
8,200
-600
5,200
21,500
16,400
34,700
2,700
-900
-3,800
500
2,400
Source: Alabama Department of Labor, Labor Market Information Division.
11
Total Nonagricultural
Natural Resources and Mining
Construction
Manufacturing
Durable Goods Manufacturing
Nondurable Goods Manufacturing
Trade, Transportation and Utilities
Wholesale Trade
Retail Trade
Transportation, Warehousing and Utilities
Information
Financial Activities
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Federal Government
State Government
Local Government
May 2013 to May
2014
15,100
-500
0
3,600
5,000
-1,400
4,000
0
2,800
1,200
-700
1,200
3,100
500
4,500
600
-1,200
-1,100
-300
200
May 2014 to May
2015
30,500
-800
1,700
300
2,300
-2,000
4,600
-2,300
4,300
2,600
800
1,100
7,000
6,200
6,300
500
2,800
0
2,300
500
Source: Alabama Department of Labor, Labor Market Information Division.
12
• 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 997,270
vehicles in 2014 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 autorelated projects involving $4 billion in investment and
17,000 new jobs
Source: Economic Development Partnership of Alabama (EDPA) and Alabama Department of Commerce.
13
$5,000
$4,997
All
Merchandise
$3,991
$4,000
Transportation
Equipment
Chemicals
$3,000
$2,000
$1,000
Primary Metal
Manufacturing
$1,731
$817
$631
$517
$236
$0
U.S.
$121
$301 $286
Minerals and
Ores
Alabama
Source: International Trade Administration, U.S. Department of Commerce and U.S. Census Bureau.
14
Biosciencerelated
distribution,
34% (4,353)
Research,
testing &
med. labs,
30% (3,844)
Drugs &
pharmaceuticals,
10% (1,284)
Ag. feedstock &
chemicals, 13%
(1,651)
Med. devices & equip.,
13% (1,662)
Note: Number of employees in parenthesis.
Source: U.S. Bureau of Labor Statistics data from Batelle/BIO report.
15
$73,583
Drugs & pharmaceuticals
$72,338
Ag. feedstock & chemicals
Bioscience-related distr.
$66,255
Medical devices & equip.
$55,958
Research, test. & med. labs
$46,939
Bioscience industries average
$65,727
All private sector industries
$41,074
$0
$40,000
$80,000
Source: U.S. Bureau of Labor Statistics data from Batelle/BIO report.
16
2,100
Employment (Thousands), Unemployment Rate (Percent), 1990-2015
12
Employment
10
1,900
8
1,800
6
1,700
4
1,600
2
1,500
1990
0
1995
2000
2005
2010
Unemployment Rate
Nonfarm Employment
Unemployment Rate
2,000
2015
Source: Alabama Department of Labor.
17
102
1980
1981
1990
2001
2007
100
98
96
94
92
90
1
6
11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86
Number of months
Source: Estimates based on Alabama Department of Labor data.
18
69
67
United States
65
63
Alabama
61
59
57
55
Source: Bureau of Labor Statistics.
19
69
United States
67
65
63
Alabama
61
59
57
55
Source: Bureau of Labor Statistics.
20
Tax
Total Collection
Percent
Change
From
Year Ago
Change in
Revenue
from Year
Ago Level
Total
$6,706,712,911
4.5%
$290,441,062
Income (Individual)
$2,729,780,193
5.4%
$139,529,597
Sales
$1,414,411,305
3.7%
$51,048,960
Source: Alabama Department of Revenue.
21
This Alabama GDP and employment forecast
summary is the CBER June 2015 forecast
Preliminary 2016 forecast also included below
Probability: Forecast (60 Percent) and Range (90 percent)
(Percent change)
Real GDP
2013
2014
2015
2016
2.0
2.0
2.3
2.5
1.5 to 3.0
2.0 to 3.0
1.4
1.5
0.5 to 2.0
0.8 to 1.5
4.0
3.5
2.5 to 4.8
1.5 to 4.0
range
Employment
1.0
0.7
range
Total Tax Receipts, FY
range
4.0
1.3
22
Annual Percent Change
6
4
Alabama
GDP
2
0
-2
Nonfarm
Employment
-4
-6
2000
2004
2008
2012
2016
Source: U.S. Bureau of Economic Analysis, Alabama Department of Labor, and
Center for Business and Economic Research, The University of Alabama.
23
100
90
80
70
Index
60
50
52.9
51.9
51.2
Q3
Q4
Q1
47.7
55.6
55.5
Q2
Q3
57.4
57.6
Q1
Q2
54.2
40
30
20
10
0
Q2
2013
2014
Q4
2015
24
60
58.4
55
56.5
Alabama
50
45
40
United
States
35
Q2
Q3
2012
Q4
Q1
2013
Q2
Q3
Q4
Q1
2014
Q2
Q3
Q4
Q1
Q2
2015
25
65
61.5
Sales
60
55
56.8
50
Profits
45
40
Q2
2012
Q3
Q4
Q1
Q2
Q3
2013
Q4
Q1
Q2
Q3
2014
Q4
Q1
Q2
2015
26
58
57.1
56
Hiring
54
55.4
52
50
48
46
44
Capital Expenditures
42
Q2
Q3
2012
Q4
Q1
Q2
2013
Q3
Q4
Q1
Q2
2014
Q3
Q4
Q1
Q2
2015
27
70
68.7
65
60
57.6
55
50
45
40
35
30
31.5
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
2002 2003 2004 2005 2006 2007 2008 2009 2010
Q1
Q1
Q1
Q1
Q1
2011 2012 2013 2014 2015
28
100%
Non-Metro Areas
90%
22.31
23.02
5.16
5.07
70%
8.14
8.84
60%
8.85
50%
11.45
40%
1.41
2.26
2.45
2.66
80%
Montgomery
9.09
Huntsville
11.22
1.92
2.91
2.98
2.85
Florence-Muscle Shoals
Dothan
Decatur
31.12
26.65
10%
0%
Mobile
Gadsden
30%
20%
Tuscaloosa
Birmingham-Hoover
Auburn-Opelika
2.20
1.99
GDP
3.03
2.43
Anniston-Oxford-Jacksonville
Employment
Source: Alabama Department of Labor and U.S. Bureau for Economic Analysis.
29
5.9
Tuscaloosa
6
Montgomery
May-15
6.3
6.4
7
Mobile
Huntsville
5.5
Gadsden
6
6.1
7.1
6.3
6.2
Decatur
Daphne-Fairhope-Foley
Birmingham-Hoover
Auburn-Opelika
7.6
6.6
6.8
5.3
5.6
5.5
5.8
5.1
5.3
7.1
Anniston-Oxford
6.2
Alabama
United States
7.5
7
Florence-Muscle Shoals
Dothan
May-14
5.3
7.9
6.6
6.1
Source: Alabama Department of Labor.
30
United States
Alabama
Anniston-Oxford
Auburn-Opelika
Birmingham-Hoover
Daphne-Fairhope-Foley
Decatur
Dothan
Florence-Muscle Shoals
Gadsden
Huntsville
Mobile
Montgomery
Tuscaloosa
$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 BirminghamHoover 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.
31
United States
Alabama
Anniston-Oxford
Auburn-Opelika
Birmingham-Hoover
Daphne-Fairhope-Foley
Decatur
Dothan
Florence-Muscle Shoals
Gadsden
Huntsville
Mobile
Montgomery
Tuscaloosa
High school or higher, Percent
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
86.6
84.5
80.3
89.5
87.0
90.6
80.8
84.1
83.4
81.9
88.8
85.8
85.7
86.7
Bachelor's degree or higher, Percent
Source: U.S. Census Bureau, 2013 American Community Survey 1-year estimates.
32
Metro Area
Alabama
Anniston-Oxford
Auburn-Opelika
Birmingham-Hoover
Daphne-Fairhope-Foley
Decatur
Dothan
Florence-Muscle Shoals
Gadsden
Huntsville
Mobile
Montgomery
Tuscaloosa
Total Merchandise
Exports
$19.3 billion
$192.7 million
$395.4 million
$1.9 billion
$515.3 million
$673.1 million
$374.7 million
$229.7 million
$54.6 million
$1.5 billion
$1.5 billion
$1.7 billion
NA
Source: International Trade Administration, U.S. Department of Commerce.
33
Alabama
Anniston-Oxford
Auburn-Opelika
Birmingham-Hoover
Daphne-Fairhope-Foley
Decatur
Dothan
Florence-Muscle Shoals
Gadsden
Huntsville
Mobile
Montgomery
Tuscaloosa
2013
100.0
1.1
2.4
11.1
3.1
4.0
2.2
1.4
0.3
9.0
9.2
9.9
NA
2012
100.0
1.2
2.6
11.4
NA
3.8
1.6
0.8
0.2
8.8
11.2
10.4
NA
Source: International Trade Administration, U.S. Department of Commerce.
34
7/1/2013
Alabama
Anniston-Oxford
Auburn-Opelika
Birmingham-Hoover
Daphne-Fairhope-Foley
Decatur
Dothan
Florence-Muscle Shoals
Gadsden
Huntsville
Mobile
Montgomery
Tuscaloosa
4,833,722
116,736
150,933
1,140,300
195,540
153,374
147,691
147,317
103,931
435,737
414,079
373,510
235,628
7/1/2010 to 7/1/2013
Number
Percent
Change
Change
48,152
-1,712
10,083
11,204
12,317
-488
1,815
88
-567
16,306
789
-1,698
5,154
1.0
-1.4
7.2
1.0
6.7
-0.3
1.2
0.1
-0.5
3.9
0.2
-0.5
2.2
Source: U.S. Census Bureau.
35
Nonfarm Employment
Alabama
Anniston-Oxford
Auburn-Opelika
Birmingham-Hoover
Decatur
Dothan
Florence-Muscle Shoals
Gadsden*
Huntsville*
Mobile*
Montgomery
Tuscaloosa
Net Jobs in Metropolitan Areas
Net Jobs in Nonmetro Counties
2007 or 2008
Peak Year
2,005,700
53,400
54,800
533,400
58,600
63,100
57,300
38,000
214,300
184,600
178,000
98,500
Job Loss (Gain)
Number
Percent
47,600
2.4%
7,000
13.1%
-5,900
-10.8%
11,400
2.1%
4,600
7.9%
6,100
9.7%
1,700
3.0%
300
0.8%
-6,000
-2.8%
5,900
3.2%
6,900
3.9%
-5,600
-5.7%
26,400
21,200
* 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 Labor and U.S. Bureau of Labor Statistics.
36
Alabama
57.4
Birmingham-Hoover
58.1
Huntsville
54.9
Mobile
58.2
Montgomery
59.4
52.0
53.0
54.0
55.0
56.0
57.0
58.0
59.0
60.0
49
Anniston-Oxford
Auburn-Opelika
Birmingham-Hoover
Daphne-Fairhope-Foley
Decatur
Dothan
Florence-Muscle Shoals
Gadsden
Huntsville
Mobile
Montgomery
Tuscaloosa
Nonfarm Employment
Real GDP
Forecast, Percent Forecast, Percent
0.3
1.3
2.5
3.7
1.0
1.5
1.2
3.0
0.4
1.0
1.4
1.8
1.0
3.5
1.1
1.4
2.0
3.8
1.2
3.2
0.9
1.4
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.
38
Labor force participation (2012): Alabama 57.3% United States 63.7%
Population Growth
Alabama
United States
1990-2000
10.1%
13.2%
2000-2010
7.5%
9.7%
2010-2013
1.1%
2.4%
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%)
48
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.
40
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.
41
1930
44
1940
45
1950
47
1960
46
1970
47
1980
46
1990
40
2000
43
2009
41
2010
41
2011
41
2012
41
2013
42
Source: Estimates
based on Bureau of
Economic Analysis data.
44
2013: U.S. $44,543
Alabama $36,501
90
80
70
60
50
40
1929: U.S. $697
Alabama $318
30
1929
1938
1947
1956
1965
1974
1983
1992
2001
2010
43
90
80
70
2013: U.S. $44,543
Alabama $36,501
60
50
40
1929: U.S. $697
Alabama $318
30
1929
1938
1947
1956
1965
1974
1983
1992
2001
2010
44
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
Universities (Largely Public Good)
Vocational and Community Colleges (Mostly Public Good)
Pre-Kindergarten to High School (Pure Public Good)
Development Policies must be Optimal = Efficient, Fair, Flexible, Sustainable
47
Center for Business and Economic Research
Culverhouse College of Commerce
The University of Alabama
Box 870221
Tuscaloosa, Alabama 35487-0221
205.348.6191
http://cber.cba.ua.edu
Serving Alabama Since 1930
46
100
90
80
70
Index
60
50
47.7
57.4 57.6
52.9 51.9 51.2 55.6 55.5 54.2
40
30
20
10
0
Q2 Q3
2013
Q4
Q1
Q2 Q3
2014
Q4
Q1 Q2
2015
47
National and Alabama Economic Outlook
Much Better
2.2
3.6
Alabama
41.1
38.4
Somewhat Better
45.1
Remain the Same
39.7
11.2
Somewhat Worse
Much Worse
National
17.0
0.4
1.3
48
Sales
Strong Increase
Moderate Increase
No Change
Moderate Decrease
Strong Decrease
4.9
50.9
30.4
12.9
0.9
0
Profits
Strong Increase
10
20
30
40
50
60
50
60
4.9
Moderate Increase
39.7
No Change
34.4
Moderate Decrease
19.6
Strong Decrease
1.3
0
10
20
30
40
49
Hiring Plans
Strong Increase
3.1
Moderate Increase
33.5
No Change
52.2
Moderate Decrease
11.2
Strong Decrease
0.0
0
10
20
30
40
50
60
Capital Expenditures
Strong Increase
Moderate Increase
No Change
Moderate Decrease
Strong Decrease
3.1
29.0
55.4
11.2
1.3
0
10
20
30
40
50
60
50
68.7
70
65
60
57.6
55
50
45
40
35
31.5
30
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
51
60
58.4
55
56.5
Alabama
50
45
40
United
States
35
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012
2013
2014
2015
52
65
61.5
60
Sales
56.8
55
50
Profits
45
40
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012
2013
2014
2015
53
56
57.1
55.4
54
52
Hiring
50
48
46
44
Capital Expenditures
42
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012
2013
2014
2015
54