The economy in the state of Alabama is expected to improve in 2014, according to the annual forecast by the Center for Business and Economic Research at the Culverhouse College of Commerce and Business.
“In 2013, the Alabama economy grew by around 2 percent and I think we’re a little more optimistic for the next year; it may grow by around 2.5 percent this year,” said Ahmad Ijaz, Director of Economic Forecasting at CBER. “We expect employment to also pick up a little bit. It’s getting better, but it’s getting better really slowly.”
Ijaz warned Alabama residents to expect merchandise prices to increase now that the economy is picking up. However, the increase will be offset by a drop in gas prices.
According to Ijaz, the decrease in unemployment is somewhat misleading, because it takes into account not only people who have been hired, but also people who are still unemployed but have given up looking for a job. Additionally, most of the jobs that were added in the last year were temporary, part-time or unskilled labor.
“We want growth in more skilled jobs, and that’s not been the case. And that’s not just unique to Alabama; every state is grappling with the same issue,” Ijaz said. “I think overall Alabama is doing relatively well and one reason for that is the automotive sector.”
Over the past 25 years, the job market in Alabama has shifted away from textiles and apparel to automotive manufacturing. Companies like Mercedes-Benz, Honda, Hyundai and Toyota all produce either cars or engines in Alabama.
Ijaz gave a few pieces of advice for future UA graduates hoping to succeed in Alabama’s economy.
“Get all the skills that you can,” Ijaz said. “A lot of firms that I’ve talked to have become very picky about what skills they need. There are definitely jobs in skilled sectors. For example, if you’re in engineering, you’ll definitely be able to find a job.”
However, he cautioned students that getting their dream job right out of school is not necessarily a realistic goal in this economy.
“It used to be, if you majored in finance you would start working in finance; that’s not the case anymore,” Ijaz said. “You may have to take something less than what you expected just to get your foot in.”
Socioeconomic analyst Carolyn Trent works to compile the “Alabama Business Confidence Index,” which shows what the executives of major businesses across the state are thinking about the economy and whether or not they are willing to hire more workers. Trent said slow economic growth combined with issues at the federal level, such as the budget crisis and the government sequester, made businesses reluctant to hire last year. In 2013, Huntsville, Oxford and Anniston, Ala. were the hardest hit areas in the state.
Trent said he maintains a positive outlook towards 2014 and contends that, despite the difficulties over the last year, Alabama remains a strong environment for business. Area Development Magazine ranked Alabama the fourth-best state in the nation for business in 2013, and a Kaufman Foundation survey on small business friendliness gave the state an A+ rating.
“Relative to other southeastern states in particular, I think our business environment is regarded as being pretty business-friendly,” Trent said. “That’s a plus for attracting other companies to the state.”
Ijaz and Trent will discuss the forecast Wednesday at the annual Economic Outlook Conference in Montgomery, which will be attended by business leaders from across the state as well as representatives from many state agencies.
