AlabamaBusiness
Center for Business and Economic Research, Culverhouse College of Commerce, The University of Alabama
Volume 73, Number 1
Economic Outlook:
1st Quarter 2004
United States
Overview. The nation’s gross domestic product grew at an astounding
8.2 percent annual rate in the third
quarter of 2003, the strongest pace
seen since the first quarter of 1984.
Nevertheless, this overall recovery
has been one of the slowest, with
no significant employment gains.
The lack of pent-up demand in
both housing and consumer markets,
above average productivity gains,
and excess capacity (or underutilized
capacity) in manufacturing are some
of the reasons why the current recovery has been a jobless one. In some
areas, particularly the industrial sector, it does not even seem like a
recovery.
Despite slow going, the U.S. economy is showing signs that recovery is
First Quarter 2004
underway. Even the
labor markets are on the
verge of a turnaround.
From September to
December 2003, the
number of people filing
for state unemployment
benefits dropped by
500,000. The second half
of 2003 also brought significant improvements in
business spending and
profitability. Consumer
spending on durable
goods increased by over
seven percent in 2003,
while spending on computers and software rose more than
30 percent and 13 percent, respectively. After declining for six straight
quarters, capital spending by businesses increased more than 8.5 percent during the last three quarters of
2003.
Inflation. A rebound in the economy is generally accompanied by an
increase in both inflation and interest rates, but not this time. In
November the inflation
rate fell to its lowest level
in 40 years. Even with
industrial production
improving and housing
markets strengthening,
the consumer price index
dropped 0.2 percent,
bringing the annual rate
of inflation to 1.8 percent
for 2003. The core rate
of inflation, excluding
food and energy, dropped
by 0.1 percent, the first
decline seen in the core
rate since 1982. One rea-
son for this behavior could be that
both ample capacity in manufacturing and unemployment are putting
downward pressure on prices.
Inflation may have bottomed out
and it should remain subdued in the
near term. Consumer prices could
rise about 1.3 percent in the first half
of 2004. Then as employment
begins to improve in the second half
of the year, we could see another
increase in prices.
In this issue:
Economic Outlook:
1st Quarter 2004
1
Business Leaders Confidence
Index: 1st Quarter 2004
5
Selected Indicators
9
Alabama Metropolitan Areas:
Working Toward a Strong
2004
10
2
Alabama Business
ing increase of nine to
ten percent in 2004.
Technology related
industries, which have
laid off workers during
the last four years, are
also beginning to show
some signs of a revival.
Industrial activity is
expected to increase at
an over five percent
annualized rate during
the first half of 2004.
Industrial Production. Manufacturing activity surged in December,
showing significant gains on new
orders and employment. The
Institute of Supply Management’s
index of manufacturing rose to 66.2,
versus the November reading of 62.8.
This was the largest increase in nearly
20 years. An index value of over
50.0 indicates an expansion in manufacturing activity. The index for new
orders increased to 77.6 from 73.7 in
November, the highest level since
July, 1950. Over the last four years,
the country’s manufacturing sector
has been plagued by numerous difficulties—foreign competition, lack of
pricing power, a deflationary economic environment, and excess
capacity. In the long term, manufacturing will continue to lose jobs, particularly in labor intensive industries,
and the sector will account for a
smaller share of the nation’s output.
But with business spending currently
showing improvement, manufacturing should post a recovery this year.
The relatively weaker dollar and
improvement in world economies
should also benefit manufacturers
who are involved in export markets.
Business spending showed signs of
improvement in the second half of
2003, and is expected to continue on
a gradual path to recovery. We
could possibly see a business spend-
Employment. After five
months of consecutive
increases in employment, payrolls grew by only 1,000 in
December. However, the unemployment rate dropped from 5.9 percent
to 5.7 percent. The decline in the
unemployment rate was not because
of increased employment, but rather
because of a decline of 309,000
people in the civilian labor force.
Payroll employment growth has been
slow in part because retailers have let
people go. In particular, retailers
hired far fewer workers during the
2003 Christmas season than they
usually do.
While retailers cut jobs, service producing industries had an overall
employment increase, even though
individual components behaved differently. Temporary health services
added jobs in December whereas
professional and administrative services lost jobs.
Manufacturing lost
26,000 further jobs in
December, the 41st
straight month of
decline. In general, payroll employment should
show gradual improvement throughout 2004,
although we could see a
decline in productivity
growth.
Outlook. Consumer
confidence remained
strong in January with the prospects
of improving payroll employment.
Interest rates, presently at their 45year lows, are expected to stay low, at
least through the first half of the
year. Strong profits are expected to
fuel an increase in capital spending.
However, consumer demand may
slow down because of the diminishing effects of tax cuts and gradually
rising interest rates, particularly mortgage rates. The U.S. economy in the
first half of 2004 is expected to grow
by around 4.5 percent and perhaps
by 5.0 percent in the second half.
Alabama
Employment. During the twelve
month period ending in November
2003, the state lost 14,200 jobs. The
hardest hit sector was manufacturing,
losing 11,200 jobs, with losses spread
across every manufacturing industry
except motor vehicle production.
Although the media has focused in
recent years on the loss of apparel
jobs, during 2003 the industries producing durable goods actually lost
more jobs than those producing nondurable goods such as apparel. Both
excess capacity and stiff competition
continue to hurt Alabama’s manufacturers. Some large payroll losses
were seen in textiles (2,200), apparel
(1,000), primary and fabricated metals production (2,200), and computer
Alabama Business
and electronic product manufacturing (1,800). However, the rate of job
loss has slowed considerably and, in
the last two months, the state’s economy has added jobs in some service
related businesses.
Within the service-producing sector,
the hardest hit industries have been
professional and business services
and retailing. Decline in demand,
excess capacity, and competition
plague both these industries. During
the twelve month period ending in
November 2003, retailers shed nearly
600 jobs, while administrative and
support services declined by 2,000
jobs. Most jobs lost in retailing were
in motor vehicle and parts dealers
(700), food and beverage stores
(1,000), and clothing and accessory
stores (300). However, as the economy improves, payrolls in service
industries will also improve.
Tax revenues. After one of the
worst fiscal years in decades, the first
quarter of the current fiscal year
(FY2004) showed a significant
improvement. The tax system in the
state faces long-term structural problems but, with improving business
spending and payrolls, tax collections
in the current fiscal year could easily
surpass last year’s collections.
During the first three months of the
current fiscal year, total tax receipts
increased by 9.5 percent over the first
quarter of the previous fiscal year,
from $1.4 billion to slightly over
$1.5 billion. Individual income tax
receipts were up 7.3 percent.
3
Collections increased from $533 million during the first quarter of the
previous fiscal year to $572 million
in the current fiscal year. Corporate
income tax revenues rose from $38.6
million to $70.8 million, an increase
of approximately 83 percent. A significant improvement was also seen
in sales tax collections, with tax
receipts up from $385 million to
almost $425 million, an average
annual increase of over ten percent.
During the first quarter of FY2004,
the Alabama Education Trust Fund
received approximately $1.2 billion,
an increase of close to $202 million
over the collections during the first
quarter of the previous fiscal year.
However, General Fund collections
declined by almost $46 million over
4
Alabama Business
Alabama Nonagricultural Employment
Change in Number of Jobs
November 2002 to
November 2003
Total Nonagricultural
Natural Resources and Mining
Construction
Manufacturing
Durable Goods Manufacturing
Wood Products Manufacturing
Primary Metal Manufacturing
Fabricated Metal Product Manufacturing
Machinery Manufacturing
Computers and Electronic Products Manufacturing
Electrical Equipment, Appliance and Component Mfg.
Transportation Equipment Manufacturing
Motor Vehicle Manufacturing
Furniture and Related Products
Nondurable Goods Manufacturing
Food Manufacturing
Textile Mills
Textile Product Mills
Apparel Manufacturing
Paper Manufacturing
Chemical Manufacturing
Plastics and Rubber Product Manufacturing
Trade, Transportation and Utilities
Wholesale Trade
Retail Trade
Transportation, Warehousing and Utilities
Information
Telecommunications
Financial Activity
Professional and Business Services
Educational and Health Services
Leisure and Hospitality
Other Services
Government
Federal Government
State Government
State Education
Local Government
-14,200
0
1,800
-11,200
-6,100
-100
-1,000
-1,200
-100
-1,800
-800
-200
0
500
-5,100
-1,000
-1,200
-1,000
-1,000
0
-800
-300
-2,400
200
-600
-2,000
200
0
500
-100
-500
-200
-400
-1,900
-400
-700
-1,100
-800
Source: Alabama Department of Industrial Relations.
Alabama Business is a quarterly
publication of the Center for
Business and Economic Research,
Culverhouse College of Commerce
and Business Administration, The
University of Alabama. Articles
reflect the opinions of the authors,
but not necessarily those of the staff
of the Center, the faculty of the
Culverhouse College of Commerce,
or the administrative officials of
The University of Alabama.
All correspondence should be
addressed to: Editor, Alabama
Business, Center for Business and
the previous year’s first quarter.
Budget woes continue to haunt
Alabama. Although improving
business spending and payroll
employment are expected to cushion
some of the shock from devastating
declines in tax revenues experienced
last year, spiraling health care costs
will continue to pose a challenge.
Increases in tax collections will
largely depend on improved payroll
employment. If, as expected, labor
markets do not improve until the
second half of the year, overall tax
revenues are expected to increase by
only about $100 million in FY2004.
Outlook. The state’s economy is
expected to grow by 3.8 percent in
2004; however, the outlook for payroll employment does not appear
especially bright. Although service
producing industries will begin to
add jobs as the economy improves,
most manufacturing industries will
languish. An exception will be in
automotive production-related industries, one of the strongest industries
in the state, with employment
increasing by over four percent.
Both services and retailing sectors of
the economy are expected to see
employment gains of around five
percent in 2004, while jobs in financial activity are estimated to grow by
over three percent.
Ahmad Ijaz
Just Released
Alabama Economic Outlook 2004
To order an Outlook, print the
Order Form from our website
at cber.cba.ua.edu or call
205.348.6191. Copies are $18.
Economic Research, The University
of Alabama, Box 870221,
Tuscaloosa, Alabama 35487-0221.
Copies of this publication as well as
other socioeconomic data resources
are available on the Center website:
http://cber.cba.ua.edu
®
First Quarter 2004 • Volume 3 • Number 1
BLCI Barometer
The increasing strength of economic growth across the nation
in 2004 will bring an improved
environment for Alabama businesses. Consumer spending
should be sustained by job
gains as productivity enhancements push their limits.
Growth in corporate profits
will help boost business investment, particularly in information technology. And low
business inventories coupled with the growing
export market resulting from a weak dollar should
provide the impetus for increased industrial production. While Alabama’s state government finances
remain in dire straits, fiscal stimuli at the federal
level will contribute to economic growth.
Over 78 percent of Alabama
business leaders expect technology needs in their industry to
grow in 2004. Rising profits
often linked to productivity
gains that result from technology
investment are helping to create
new demand for technology—
particularly computers, software,
and communications equipment.
Technology needs in 2004 are
expected to be greatest in services, where 89 percent of industry
panelists expect demand to rise.
Alabama manufacturers are least
likely to see a need for additional technology, with just 53.6 percent anticipating an increase.
Alabama Business Leaders Confidence Index
The BLCI is a quarterly online survey completed by
business leaders across Alabama who volunteer as
panelists. Equal weights are given to expectations for
the national and state economies and industry sales,
100
100
80
78.2
60
40
21.8
20
0
Yes
No
BLCI
80
60 58 56
Index
Confidence among Alabama business leaders that
quarterly economic growth will accelerate is at its
highest level of the two years the survey has been
administered. The first quarter 2004 BLCI of 67 is
six points above the fourth quarter 2003 consensus
and nine points higher than the reading of 58 a year
ago. Overall, positive sentiment about the course of
both the national and Alabama economies is substantially above last quarter. The outlook for sales is
robust, with about 78 percent of panelists forecasting
sales increases in their industry. Rising profits will
also be a strong contributor to economic activity in
the first quarter and over half of BLCI panelists
anticipate higher capital expenditures in their industry. Although still the weakest component of growth,
the hiring outlook has brightened considerably, with
close to half of survey respondents expecting their
industry to add jobs during first quarter 2004.
Do you expect the
demand for technology in your industry
to increase over the
next 12 months?
Percent
ALABAMA
61 61
67
40
20
0 Q1 Q2 Q3 Q4 Q1
2003
2004
profits, hiring plans, and capital expenditures for the
current quarter compared to the previous quarter.
Center for Business and Economic Research, The University of Alabama
The National Economy
National Economic Outlook
Q1 2004 compared to Q4 2003
60
40
20
0
The Alabama Economy
0.3
Strong Moderate
No
Moderate Strong
Decrease Decrease Change Increase Increase
80
Q1 2004 compared to Q4 2003
67.1
60
40
22.4
20
0
1.2
2
5.6
3.8
Strong Moderate
No
Moderate Strong
Decrease Decrease Change Increase Increase
Interest Rates
Interest Rates
80
Q1 2004 compared to Q4 2003
55.3
60
Percent
With the federal funds target rate at just 1.0 percent
since June and economic growth strengthening,
Alabama business leaders do not see any downside to
interest rates in the first quarter of 2004. The majority (55.3 percent) expect interest rates to hold steady
through the quarter, while 44 percent think rates
could rise. In its December 9, 2003 decision to leave
the rate unchanged, the Federal Open Market
Committee cited the effectiveness of an accommodative monetary policy coupled with productivity growth
in supporting economic activity. Some forecasters
think a hike could come in late June, while others
expect no change this year.
2.4
13.2
8.2
Alabama Economic Outlook
Percent
Although not as rosy as the national picture, the Alabama economic outlook for first quarter 2004 offers a
marked improvement over fourth quarter 2003 expectations. The 70.9 percent of BLCI panelists forecasting
accelerating state economic activity is the highest in
survey history. This reading is over 24 percentage points
higher than last quarter and compares to just 49 percent
expecting gains a year ago. New automobile manufacturer and supplier jobs should begin to kick in this quarter, while jobs in services are expected to pick up and
trade employment could build on the relative stability
of 2003. Although proposals to trim state budgets will
affect both state and local government jobs, these
impacts will be felt later in the year. Just 6.8 percent
of respondents think the Alabama economy could turn
down in the first quarter.
75.9
80
Percent
Given third quarter 2003 U.S. GDP growth estimated at
8.2 percent and indications that fourth quarter gains
should come in above those in the first half of the year,
Alabama business leaders are upbeat in their outlook for
the national economy early in 2004. Eighty-nine percent
of panelists expect the U.S. economy to strengthen in the
first quarter, including 13.2 percent anticipating substantial improvement. This compares to about 73 percent
forecasting a pickup in the national economy last quarter
and contrasts sharply with just 59.6 percent expecting
gains a year ago. The first quarter 2004 reading reflects
the highest positive sentiment since the inception of the
BLCI survey two years ago. Fewer than 3 percent of panelists think a decline in national economic activity is likely during the quarter.
43.5
40
20
0
0.0
0.6
0.6
Strong Moderate
No
Moderate Strong
Decrease Decrease Change Increase Increase
C e n t e r f o r B u s i n e s s a n d E c o n o m i c R e s e a rc h
Industry Sales
Industry Sales
80
Q1 2004 compared to Q4 2003
71.5
60
Percent
BLCI panelists are most optimistic about prospects for
first quarter sales growth. Overall, 78 percent anticipate
higher sales, a sizeable increase from 67 percent in fourth
quarter 2003 and over 22 percentage points higher than a
year ago. With consumer spending continuing to support
growth, business inventories low, a weak dollar facilitating
exports, and business spending on equipment and software coming off a strong performance in 2003, there
seems to be a number of avenues for sales growth.
Respondents in professional, scientific, and technical services, retail trade, and finance, insurance, and real estate
(FIRE) are most optimistic, with over 82 percent forecasting sales gains. Expectations are weakest in transportation, communication, and public utilities (TCPU), where
two-thirds see sales gains, but 16.7 percent think sales
could decline during first quarter 2004.
40
20
0
9.1
Strong Moderate
No
Moderate Strong
Decrease Decrease Change Increase Increase
Industry Profits
80
continued on next page
Q1 2004 compared to Q4 2003
60.9
Percent
60
40
22.4
20
0.6
9.7
6.5
0 Strong Moderate
No
Moderate Strong
Decrease Decrease Change Increase Increase
Industry Hiring
Industry Hiring Plans
80
Q1 2004 compared to Q4 2003
60
Percent
Expectations among Alabama business leaders confirm
that jobs will likely remain the weakest link in the expansion during the first quarter of 2004. Still, the prospects
for job creation are the highest since the survey's inception
in the first quarter of 2002. The 48.5 percent of panelists
expecting to increase hiring is almost 13 percentage
points higher than last quarter and compares to just 26.9
percent a year ago. Respondents in miscellaneous services
are most optimistic about hiring, with 69 percent expecting to add jobs this quarter. Some industries see below
average prospects for job growth—as major industrial
projects near completion, just 35.7 percent of panelists in
construction see hiring increasing. With new automotive
industry firms just beginning to hire in the first quarter,
6.5
0.3
Industry Profits
Rising profits should be a strong contributor to the economic equation in the first quarter of 2004. Over 67 percent of Alabama business leaders expect profits in their
industry to increase during the quarter, almost 10 percentage points above last quarter and 16 points higher than
sentiment a year ago. In many industries, investments in
information technology are boosting productivity and consequently increasing profits. This trend is expected to
strengthen in 2004. Panelists in finance, insurance, and
real estate (FIRE) are most optimistic about profit growth,
with almost 75 percent expecting gains. Recent manufacturing productivity gains may leave firms less sure of an
upside to profits—57.2 percent of manufacturing industry
panelists expect profits to increase in first quarter 2004,
while 16.1 percent forecast a decrease. Profit forecasts in
construction and TCPU are also seven to nine points
below average.
12.7
45.6
44.1
40
20
0
1.8
5.6
2.9
Strong Moderate
No
Moderate Strong
Decrease Decrease Change Increase Increase
C e n t e r f o r B u s i n e s s a n d E c o n o m i c R e s e a rc h
3
from previous page
41.1 percent of manufacturing panelists think their
industry will add jobs. Only 7.4 percent of respondents think jobs in their industry could decline during
the quarter—the lowest negative in two years of BLCI
surveys.
Industry Capital Expenditures
Industry Capital Expenditures
80
Q1 2004 compared to Q4 2003
60
Percent
Rising profits and an emphasis on productivity
enhancement should contribute to increased capital
spending. For the first time in two years, more then
half (58.6 percent) of Alabama business leaders expect
capital expenditures in their industry to rise during
the quarter. This compares with 47.9 percent predicting an increase in fourth quarter 2003 and is 14 percentage points above a year ago. Expectations are
highest in health care services, where 76.5 percent of
panelists expect investment to increase, followed by
miscellaneous services and public administration.
Capital investment may be less widespread in professional, scientific, and technical services, with 45.6 percent predicting a rise, and in manufacturing, at 51.8
percent forecasting an increase. Across industries,
only 7.4 percent of survey participants expect cuts in
capital investment during the first quarter.
51.5
40
34.1
20
0
1.5
5.9
7.1
Strong Moderate
No
Moderate Strong
Decrease Decrease Change Increase Increase
BLCI Panelists
The Business Leaders Confidence Index panel
continues to grow. The number of panelists completing the first quarter 2004 survey was the largest since
the inception of the BLCI in first quarter 2002.
Participants are from all major industry groups across
Alabama’s 11 metropolitan areas and many nonmetro
counties and represent a range of small, midsize, and
large companies. On the current survey, 15.9 percent
of participating firms reported annual sales under $1
The BLCI is a
Compass on Business
initiative created in
collaboration with:
million, while 20.3 percent had sales of $1 to $5
million, 36.8 percent were in the $5 to $50 million
range, and 27 percent tallied sales over $50 million.
Ranked by employment size, one third of first quarter
panelists were from firms with fewer than 20 employees, while just over a quarter employed 20 to 99, 22.9
percent reported 100 to 499 workers, and 17.9 percent
had at least 500 employees.
THE UNIVERSITY OF
ALABAMA
CENTER FOR BUSINESS &
ECONOMIC RESEARCH
For more details on the Alabama Business Leaders Confidence Index, visit www.blcindex.com/alabama/.
For more details on the Center for Business and Economic Research, visit cber.cba.ua.edu.
Alabama Business
Selected Economic Indicators
United States
Gross Domestic Product (billions)
Percent Change
10-Year Treasury Bond Rate
3-Month Treasury Bill Rate
Consumer Price Index
Inflation Rate
Housing Starts (millions)
Percent Change
Total Employment (millions)
Percent Change
Unemployment Rate
Alabama
2002/Q3
2002/Q4
2003/Q1
2003/Q2
2003/Q3
2003/Q4
9,485.6
3.26
4.26
1.65
1.81
1.58
1.70
6.40
130.24
-1.12
5.98
9,518.2
2.91
4.01
1.35
1.81
2.24
1.74
11.00
130.34
-0.44
5.83
9,552.0
2.02
3.92
1.16
1.83
2.88
1.74
1.18
130.23
-0.23
5.64
9,629.4
2.52
3.62
1.04
1.83
2.15
1.74
3.33
129.98
-0.32
5.47
9,821.2
3.54
4.23
0.93
1.84
2.20
1.88
10.18
129.91
-0.25
5.33
9,905.2
4.07
4.31
0.93
1.85
2.10
1.89
8.31
130.25
-0.07
5.22
2002/Q3
2002/Q4
2003/Q1
2003/Q2
2003/Q3
2003/Q4
1,897.4
-0.5
305.4
-3.7
1,870.1
0.0
299.7
-3.1
1,876.9
-0.8
296.2
-3.9
1,868.3
-1.0
294.0
-4.2
1,882.1
-0.8
294.8
-3.5
171.1
-2.3
167.8
-2.9
166.2
-3.4
164.6
-4.1
165.7
-3.2
134.3
-5.5
131.9
-3.2
130.0
-4.5
129.4
-4.2
129.1
-3.8
77.6
-4.9
77.1
-2.7
77.5
-2.5
77.5
-1.1
77.4
-0.3
231.8
-0.9
5.9
27.8
40.5
1,387.0
4.8
573.8
9.8
385.1
-1.2
226.0
-0.1
5.5
32.6
41.5
1,574.4
6.3
691.9
3.2
393.2
5.9
226.6
-0.7
5.6
27.1
41.4
1,664.7
-3.0
791.4
-5.1
404.2
2.6
225.3
-0.5
5.7
25.7
40.8
1,495.4
-3.0
641.0
-5.5
394.2
-0.2
228.7
-1.4
Total Nonagricultural
Employment (thousands)
1,886.9
Percent Change
-0.9
Manufacturing Employment (thousands) 306.8
Percent Change
-5.1
Durable Goods Manufacturing
Employment (thousands)
171.7
Percent Change
-2.2
Nondurable Goods Manufacturing
Employment (thousands)
135.1
Percent Change
-8.6
Wholesale Trade
Employment (thousands)
78.4
Percent Change
-5.2
Retail Trade Employment
(thousands)
226.5
Percent Change
-0.2
Alabama Unemployment Rate
5.9
Initial Benefit Claims (thousands)
23.8
Manufacturing Weekly Hours
40.8
Total Tax Revenues (millions)
1,542.1
Percent Change
6.2
Total Income Tax Revenues (millions)
678.0
Percent Change
8.9
Total Sales Tax Revenues (millions)
395.0
Percent Change
3.9
Note: All percent changes indicate change over the same period of the previous year.
Source: U.S. Bureau of Labor Statistics, U.S. Department of Commerce, Alabama Department of Industrial Relations,
Alabama Department of Revenue, and Center for Business and Economic Research, The University of Alabama.
1,516.3
4.8
643.1
12.1
424.9
10.4
9
10
Alabama Business
Alabama
Metropolitan
Areas:
Working Toward
a Strong 2004
The mild and generally jobless recovery in 2003 was not enough to pull
Alabama’s metropolitan areas out of
an employment decline that began in
2001. However, late in the year the
job numbers improved, with a comparison of December 2003 to
December 2002 putting the metro
area loss at about 5,560, a 0.4 percent
decline. This contrasts with the year
over loss of 16,560 jobs that was seen
in September. Losses in Alabama’s
45 nonmetro counties have also
slowed, although the 4,840 decline in
jobs between December 2002 and
December 2003 amounts to a drop
of 1.1 percent. Softening job losses
in the metro areas suggest that as the
recovery continues to incorporate job
growth, overall gains will come more
easily to the state’s metro areas. At
77.6 percent, the share of nonagricultural jobs in the 22 metro area counties in December 2003 was up from
77.1 percent a year ago.
Despite declining employment in 2003, the number
of residents willing and able
to work rose in every metro
area except Florence, which
saw its civilian labor force
shrink by almost 800 workers between December 2002
and December 2003.
Unemployment in seven
metro areas was below the
statewide average of 5.6 percent for the year, with
Tuscaloosa and AuburnOpelika both under 4.0 percent. The four metros—
Decatur, Florence, Gadsden,
and Mobile—that saw
unemployment above the
statewide average are still
trying to rebound from
steep manufacturing losses
over the past several years
in industries including
paper, chemicals, steel, and
textiles and apparel.
Metropolitan Area Nonagricultural
Employment
December 2003
Change from
Employment December 2002
Alabama
1,885,000
Anniston
49,100
Auburn-Opelika 46,600
Birmingham
484,200
Decatur
58,100
Dothan
67,600
Florence
50,500
Gadsden
38,500
Huntsville
180,400
Mobile
225,400
Montgomery
165,200
Tuscaloosa
84,100
Russell County
12,290
Net Jobs in Metropolitan Areas
Net Jobs in Nonmetro Counties
-10,400
-100
-1,100
2,400
600
-1,000
-1,600
-500
-4,900
-1,000
1,700
0
-60
-5,560
-4,840
Source: Alabama Department of Industrial
Relations.
Projects announced and/or under
construction in 2003 should yield a
growing number of jobs during 2004
at Alabama’s new and expanding
automobile manufacturers and suppliers, many of which are located in
the metropolitan areas. Honda,
which draws suppliers and workers
from the metro areas to its Talladega
County plant, will begin building the
Pilot SUV
on its new
production
line in
April.
Mercedes’
second
plant in the
Tuscaloosa
metro area
is nearing
completion
and will
come online
later in 2004
to produce
the new
Grand Sports Tourer. And Montgomery’s Hyundai is readying for a
June 2004 test run in preparation for
production in March 2005. Aerospace and national defense initiatives
will benefit some metro areas as well.
Health care-related developments,
including hospital additions and
growth in biomedical research,
should contribute to job gains. And
the retail sector continues to expand
as the state’s metro areas strengthen
their roles as retail hubs, drawing
shoppers from nearby rural counties.
Preparing workers for these new jobs
is a key focus across the metro areas.
So are projects that will add to the
quality of life of residents, including
downtown revitalization, riverfront
development, increasing entertainment options, and public school construction. Across Alabama, the
metro areas are well-positioned to
reap the benefits of their hard work
and an improving economy in 2004.
Carolyn Trent
Alabama Business
Metro Area 2003 Highlights
and riverfront.
Anniston: New and expanding
auto suppliers; Anniston Army
Depot adding workers; continued
McClellan development; Anniston
streetscaping and retail growth; settlement of PCB lawsuit; new recreational facilities in Oxford.
Dothan: Continuing retail growth
strengthens role as shopping hub;
new and expanding manufacturers,
including sign industry; downtown
revitalization and park playgrounds
in Dothan; Daleville convention
center; new industrial park in Ozark.
Auburn-Opelika: Retail growth
underway with Colonial Mall stores
opening and Tiger Town under construction; new and expanding auto
suppliers and other manufacturers;
medical center expansion; new recreational facilities.
Florence: Manufacturing job losses
stemmed with new SCA Tissue plant
raising production and employment
and expansions at existing manufacturers; construction of RSA’s River
Heritage Hotel and Robert Trent
Jones golf course underway; Muscle
Shoals and Tuscumbia growing.
Birmingham: New and expanding
auto suppliers; Pemco and other
manufacturing expansions; strong
suburban population growth with a
number of large-scale residential/
retail/office developments planned;
growing biotechnology; RSA’s Ross
Bridge Golf Resort and Conference
Center under construction; loft and
office development in downtown
Birmingham.
Decatur: Boeing adding workers;
other manufacturers expanding; retail
and housing development in southwest Decatur; business growth in
downtown Decatur and ongoing
planning for entryways, downtown,
Gadsden: Strong job gains in professional and business services; new
and expanding auto suppliers and
other manufacturers; Gadsden
focusing on capital improvement
projects—library expansion,
Noccalula Falls, and riverfront and
convention center development.
Huntsville: Toyota engine plant
online and expanding; new and
expanding auto suppliers and other
manufacturers; NASA Orbital Space
Plane and building construction;
national defense projects with
Boeing, Northrop Grumman and
others; downtown Huntsville and
11
Some Common Threads
in 2003
• New and expanding auto
manufacturers and suppliers
• Expanding aerospace and
national defense industries
• Growing labor force
• Workforce development
initiatives
• Downtown revitalization and
riverfront development
• Development of recreational
and leisure facilities
World Famous Bridge Street development.
Mobile: Gulf Coast condo building and sales strong; shipbuilding
and aerospace manufacturing
expanding; growing auto industry
interest in container shipping
through Port of Mobile; Carnival’s
Holiday to dock at cruise port to be
built at Mobile Landing; new USA
research park.
Montgomery: Construction
employment up with work on
Hyundai and area supplier plants;
Hyundai employment growing for
June 2004 test run; retail and residential growth in east Montgomery and
suburban Prattville and Wetumpka;
Montgomery downtown revitalization centered on multi-use baseball
stadium and riverfront.
Tuscaloosa: Mercedes expansion to
add 1,600 workers starting in 2004;
five new Mercedes suppliers and
substantial expansions at existing
suppliers; construction employment
strong; workforce development initiatives; site preparation for major retail
development; five new public
schools opened.
12
Alabama Business
AlabamaBusiness
The Center for Business
and Economic Research
gratefully acknowledges
the financial support of
Compass Bank.
The Word Is Out About
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(BLCI) is quickly earning the respect of a wide range
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wonder? Using a convenient online quarterly survey,
the BLCI is able to gather insights and projections from
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information can serve as a helpful forecasting tool, offering an accurate pulse on the kind of activity you may see
in the coming quarter.
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