Economic Outlook Ahmad Ijaz Center for Business and Economic Research Culverhouse College of Commerce The Greater Shelby Chamber of Commerce Birmingham, Alabama January 31, 2017 cber.cba.ua.edu 205-348-6191
Overview: U.S. Economy • The current economic recovery (now into its 8 th year) has been the slowest recovery in postwar history. • Compared to its peak in 4th quarter 2007, GDP is only about 12 percent higher while the number of employed is only 3.4 million higher. • Inflation adjusted GDP growth slowed in the first half of 2016 but is expected to be around 2.5 percent in the second half of 2016, for an annualized rate of 1.6 percent. GDP is forecasted to grow 2.3 percent in 2017. • Consumer spending will remain the main source of growth, rising by 2.8 percent in 2017, at approximated the same rate as 2016. • Nonresidential business spending will rise 4.6 percent in 2017, following a 0.2 percent drop in 2016. • Weak income growth, relatively high debt levels will continue to keep consumers cautious, despite the job growth seen in recent months, historically employment growth is still relatively sluggish, and most of the jobs being added are either temporary (about 30 to 40 percent), part-time and/or in low wage sectors of the economy. 2 Center for Business and Economic Research, Culverhouse College of Commerce, The University of Alabama 2
U.S. Economy GDP, Consumer Spending and Investments Inflation Adjusted Chained 2009 Dollars (Annual Percent Change) 20 15 10 5 0 GDP -5 -10 CONS. SPENDING -15 NON-RESIDENTIAL INVESTMENTS -20 RESIDENTIAL INVESTMENTS -25 -30 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Bureau of Economic Analysis and IHS Global Insight. 3
U.S. Economic Outlook (Percent change unless otherwise noted) 2014 2015 2016 2017 2018 Real GDP 2.4 2.6 1.6 2.3 2.6 Consumption 2.9 3.2 2.7 2.8 3.2 Residential Investment 3.5 11.7 4.7 2.7 3.1 Commercial, Healthcare Structures 12.9 10.1 15.4 6.1 5.1 Nonresidential Fixed Investment 6.0 2.1 -0.2 4.6 4.5 Federal Government -2.5 0.0 0.7 0.3 -0.8 State & Local Government 0.2 2.9 0.9 0.8 1.4 Exports 4.3 0.1 0.4 1.9 2.3 4.4 4.6 0.9 4.4 6.4 Imports 1.9 2.1 1.7 1.3 1.2 Payroll Employment 6.2 5.3 4.9 4.6 4.3 Unemployment Rate 1.6 0.1 1.3 2.5 2.1 CPI Inflation Light Vehicle Sales (Millions) 16.46 17.40 17.41 17.38 17.57 Source: IHS Global Insight, January 2017. 4
Shares of nonfarm employment (2015) and Alabama Gross Domestic Product (2015) by industry 100% All Other 90% 22.42 Government 80% 39.52 70% 19.38 Leisure and Hospitality 60% 9.74 16.28 Education and 50% Healthcare Service 3.13 11.68 40% Professional and 7.62 Business Services 11.70 30% 9.20 Retail Trade 7.05 20% 11.86 10% Manufacturing 17.20 13.22 0% 1 2 Share of Alabama GDP Share of Alabama Non-farm Employment Source: Bureau of Economic Analysis, Bureau of Labor Statistics. . 5
Percent Change in Alabama Real GDP 8% Employment: Avg. (1991 to 2007) 21,730 Avg. (2010 to 2016) 12,250 6% GDP: Avg. (1991 to 2007) 2.5% Avg. (2010 to 2016) 1.3% 4% 2% 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -2% -4% 6
Labor Force Participation Rate (Annual) Labor Force Participation Rate (Annual) 69.0 United States 67.0 65.0 63.0 61.0 Alabama 59.0 57.0 55.0 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 2014 2015 2016 Source: Bureau of Labor Statistics. 7 7
Aging Alabama Population Population Census Estimates 2000-2015 (July 1) 2000 2015 Number Percent Under 15 years 931,589 908,974 -22,615 -2.4% 2,935,713 3,185,843 15 to 64 years 250,130 8.5% 579,798 764,162 65 years and over 184,364 31.8% Under 20 years 1,256,169 1,228,535 -27,634 -2.2% 2,611,133 2,866,282 20 to 64 years 255,149 9.8% 579,798 764,162 65 years and over 184,364 31.8% Total 4,447,100 4,858,979 411,879 9.3% Source: U.S. Census Bureau, Population Division. 8
Alabama Monthly Employment Indicators (December 2016) Not Seasonally Seasonally Adjusted Adjusted Civilian Labor Force 2,181,837 2,203,251 Percent Change from Year Ago Level 1.7% 2.7% Absolute Change from Year Ago Level 36,291 57,373 Employed 2,052,963 2,066,842 Percent Change from Year Ago Level 1.7% 2.8% Absolute Change from Year Ago Level 33,692 55,367 Unemployed 128,874 136,409 Percent Change from Year Ago Level 2.1% 1.5% Absolute Change from Year Ago Level 2,599 2,006 Alabama Unemployment Rate 5.9% 6.2% Alabama Unemployment Rate (Dec. 2015) 5.9% 6.3% U.S. Unemployment Rate 4.5% 4.7% U.S. Unemployment Rate (Dec. 2015) 4.8% 5.0% Source: Alabama Department of Labor, Labor Market Information Division. 9 9
Alabama Nonagricultural Employment Change in Number of Jobs December 2014 to December 2015 to December 2015 December 2016 Total Nonagricultural 14,900 18,600 Mining and Logging -800 -400 Construction 0 -4,700 Manufacturing 700 8,300 Durable Goods Manufacturing -600 2,900 Nondurable Goods Manufacturing 1,300 5,400 Trade, Transportation and Utilities 4,900 800 Wholesale Trade 600 -3,000 Retail Trade 3,000 3,200 Transportation, Warehousing and Utilities 1,300 600 Information -800 300 Financial Activities 1,100 4,200 Professional and Business Services 1,100 1,900 Educational and Health Services 4,300 1,900 Leisure and Hospitality 6,900 -1,100 Other Services 1,500 800 Government -4,000 6,600 Federal Government -200 900 State Government -1,600 3,300 Local Government -2,200 2,400 Source: Alabama Department of Labor, Labor Market Information Division. 10 10
Total Annual Nonfarm Employment and Unemployment Rate (Annual) Employment (Thousands), Unemployment Rate (Percent), 1990-2015 2,100 12 Employment Unemployment Rate 2,000 10 Nonfarm Employment Unemployment Rate 1,900 8 1,800 6 1,700 4 1,600 2 1,500 0 1990 1995 2000 2005 2010 2015 Source: Alabama Department of Labor. 11 11
Change in Alabama Employment From the Beginning of the Recession 102 1980 1981 1990 100 2001 2007 98 96 94 92 90 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105 Number of months 12 12
NonFarm Employment Only four metros past 2007/2008 annual peak in 2016 (December) 2007 or 2008 Job Loss to 2016 Nonfarm Employment Peak Year Number Percent Alabama 2,005,700 -22,100 -1.1 Anniston-Oxford 53,400 -6,900 -12.9 Auburn-Opelika 54,800 9,600 17.5 Birmingham-Hoover 533,400 -8,600 -1.6 Daphne-Fairhope-Foley 66,800 4,000 12.7 Decatur 58,600 -4,400 -7.5 Dothan 63,100 -5,900 -9.4 Florence-Muscle Shoals 57,300 -700 -1.2 Gadsden* 38,000 500 1.3 Huntsville* 214,300 11,500 2.8 Mobile* 184,600 -5,600 -3.0 Montgomery 178,000 -4,900 -2.8 Tuscaloosa 100,200 6,900 6.9 Net Jobs in Metropolitan Areas -26.600 Net Jobs in Nonmetro Counties 4,500 * Gadsden, Huntsville and Mobile employment peaked in 2008; Tuscaloosa stayed even across 2007-2008; 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. 13
Tax Revenues (FY2017, Year to Date December 2016) Percent Change in Change Revenue From from Year Tax Total Collection Year Ago Ago Level Total $2,518,612,171 5.7% $134,878,530 Income (Individual) $927,352,416 3.3% $29,869,620 Sales $571,109,718 3.0% $16,593,479 Source: Alabama Department of Revenue. 14 14
ABCI Expectations from Previous Quarters 100 90 80 70 62.7 57.4 57.6 60 55.5 54.2 53.0 55.1 54.8 52.4 52.6 51.2 Index 50 40 30 20 10 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 2017 Source: Center for Business and Economic Research, The University of Alabama. 15
ABCI History 70 65 60 55 50 45 40 35 30 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Center for Business and Economic Research, The University of Alabama. 16
ABCI and Real GDP 70 5% 4% 65 3% 60 % Change from prior year 2% 55 ABCI 1% 50 0% 45 -1% 40 -2% 35 -3% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ABCI, Annualized Index US GDP Percent Change in Chained 2009 Dollars Source: U.S. Bureau of Economic Analysis and Center for Business and Economic Research, The University of Alabama. 17
ABCI U.S. Index vs. U.S. GDP 75 5% 70 4% 65 3% % Change from prior year National Economy Index 60 2% 55 1% 50 0% 45 -1% 40 -2% 35 -3% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ABCI National Economy, Annualized Index US GDP Percent Change in Chained 2009 Dollars Source: U.S. Bureau of Economic Analysis and Center for Business and Economic Research, The University of Alabama. 18
Recommend
More recommend
