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Center for Business and Economic Research downgrades outlook for state.

By Bill Britt
Alabama Political Reporter

MONTGOMERY—In recent weeks good news about the future opening of Airbus in Mobile and reports that major expansions are underway in the motor vehicle manufacturing industry has given lawmakers something to rightfully brag about.

However, these successes are tempered by the news that the Center for Business and Economic Research at the University of Alabama, (CBER) has lowered its economic forecast for 2012

CBER, states, “…The state is struggling to boost the recovery in both output and employment.”

Sighting, “continued weakness on national and global, economy, the center, “now anticipates real GDP growth of about 2.0 percent for the year, down from a forecast of 2.5 percent last quarter.”

Job creation has been, “tepid,” according to the report with about 4,500 nonfarm jobs added across the state between May 2011 and May 2012. CBER, expects only around 10,000 jobs will be created across the state this year, a gain of about 0.5 percent.

However, according to the Current Population Survey (CPS) a monthly survey of households conducted by the Bureau of Census for the Bureau of Labor Statistics the unemployment rate for Alabama rose only 0.2 percentage points in May 2012 to 7.4%. The state unemployment rate was 0.8 percentage points lower than the national rate for the month. The unemployment rate in Alabama peaked in September 2009 at 10.6% and is now 3.2 percentage points lower. From a post peak low of 7.2% in April 2012, the unemployment rate has now grown by 0.2 percentage points.

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These are not the types of numbers that will see Alabama’s Governor Bentley receiving a paycheck in the near future. Bentley used the idea of not taking a paycheck until the state reached full employment during his campaign for the state’s top office.

A campaign strategy attributed to David Mowrey, of Mowery Consulting Group, LLC, in Montgomery.

According to the CBER report Unemployment fell from 9.3 to 7.4 percent over the past year, but the was in part, “due to a shrinking labor force in most of the state.”

(See end of story for more on unemployment statistics, Lies, damn lies and unemployment numbers.)

In their study CBER says that the state government sector jobs have been the hardest hit with 7,200 jobs lost over the past year, while local government employment has fallen by 2,100 jobs.

CBER says, “The jobs picture appears to be stabilizing in most Alabama metro areas in recent months.” But only Florence-Muscle Shoals saw an increase in nonfarm employment coupled with labor force growth over the past 12 months,.

The report shows that, “exports continue to be a source of strength for the state’s economy,” up 14 percent to $4.8 billion during the first three months of 2012 compared to first quarter 2011. But they center also worries that the Euro debt crisis and other financial woes abroad could dampen the outlook.

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They state that, “tax receipts are continuing to grow in FY2012, with total revenues up almost 4.0 percent through June.” Also the ETF has risen 6.8 percent first nine months of this fiscal year, and general fund appropriations are up 21.9 percent. They expect these trends to continue for FY2012.

CBER, says that “Business sentiment among executives statewide, measured by the Center’s Alabama Business Confidence Index™ (ABCI), fell 6.6 points to 50.2 on the third quarter 2012 survey.” This is interpreted to mean that statewide companies do not expect an uptick in the economy this quarter and this will lead to, “cautious hiring and capital investments.”

Written By

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.



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