Alabama Economy, Employment Stronger in 2005, According to UA Business Center’s Forecast

TUSCALOOSA, Ala. – Alabama’s economy is expected to grow by 3.3 percent this year, according to the first quarter 2005 forecast from the Center for Business and Economic Research at The University of Alabama.

“That’s a little below the nation’s projected increase of 3.7 percent,” said Ahmad Ijaz, economic analyst. “Strong gains in the first half of the year could slow in the second as consumer spending weakens and construction activity declines slightly,” Ijaz said.

According to the Center’s forecast, the state’s non-agricultural payrolls will add about 27,700 workers during 2005 for a 1.5 percent gain.

“This continues the rebound that began in 2004 when about 20,000 jobs were created, following three straight years of job losses,” Ijaz said. “Almost 7,000 of the new jobs will be in professional and business services and health services. Construction is expected to increase employment by about 1,700, while retail trade will add almost 3,000 workers during the year. Alabama’s manufacturing sector as a whole will post its first annual net job gain since 1998.”

Ijaz said strong growth in motor vehicle and other transportation equipment industries will eclipse modest losses in textiles and apparel to boost manufacturing jobs by over 6,000 in 2005.

The full quarterly forecast report is in the Alabama Business newsletter, available online at the Center’s website http://cber.cba.ua.edu. A more detailed 2005 annual forecast is published in the Alabama Economic Outlook 2005, which can be ordered for $30 from the website or by calling 205/348-6191.

UA’s Center for Business and Economic Research has been Alabama’s primary business, economic and demographic research center since its founding in 1930. CBER constructed an econometric model which is used to forecast economic activity in the state. Since 1980, forecasts from the model have been published in the annual Alabama Economic Outlook series.