West Alabama Real Estate Summit Tuscaloosa, AlabamaAugust 24, 2012 Ahmad Ijaz Center for Business and Economic Research Culverhouse College of Commerce and Business Administration The University of Alabama

Economic recovery has lost momentum, but has not come to a halt Inventory cycle caused relatively strong growth in late 2011 and early percent economic growth expected for U.S. in 2012 and 1.8 percent for 2013, chance of another recession is currently at 25 percent Commercial and industrial loan market is gradually reviving Center for Business and Economic Research, The University of Alabama 2

State and local governments continue to lay off workers Relatively tight credit and loan markets Housing markets remain weak and distressed Rising gasoline and food prices External risks (Eurozone and China) Lack of income growth Economy will require much faster job growth for a sustained recovery Center for Business and Economic Research, The University of Alabama 3

Center for Business and Economic Research, The University of Alabama 4 Source: University of Michigan.

Center for Business and Economic Research, The University of Alabama 5 Source: Federal Reserve Board.

Center for Business and Economic Research, The University of Alabama 6 Source:

Source: IHS Global Insight, August (Percent change unless otherwise noted) Real GDP Consumption Residential Investment Commercial, Healthcare Structures Nonresidential Fixed Investment Federal Government State & Local Government Exports Imports Payroll Employment Unemployment Rate CPI Inflation Light Vehicle Sales (Millions) Center for Business and Economic Research, The University of Alabama 7

Monthly Employment Indicators (July 2012) Center for Business and Economic Research, The University of Alabama 8 Not Seasonally Adjusted Seasonally Adjusted Civilian Labor Force2,175,2982,157,890 Percent Change from Year Ago Level-1.2%-1.5% Absolute Change from Year Ago Level-25,726-31,920 Employed1,980,5991,978,355 Percent Change from Year Ago Level-0.5% Absolute Change from Year Ago Level-9,390-9,144 Unemployed194,699179,535 Percent Change from Year Ago Level-7.7%-11.3% Absolute Change from Year Ago Level-16,336-22,776 Alabama Unemployment Rate9.0%8.3% Alabama Unemployment Rate (July 2011)9.6%9.2% U.S. Unemployment Rate8.6%8.3% U.S. Unemployment Rate (July 2011)9.3%9.1% Source: Alabama Department of Industrial Relations, Labor Market Information Division.

Alabama Nonagricultural Employment Change in Number of Jobs Center for Business and Economic Research, The University of Alabama 9 Source: Alabama Department of Industrial Relations, Labor Market Information Division. July 2010 to July 2011 July 2011 to July 2012 Total Nonagricultural -6,7005,700 Natural Resources and Mining Construction -8,800-6,300 Manufacturing 1,5003,400 Durable Goods Manufacturing 2,3003,900 Nondurable Goods Manufacturing Trade, Transportation and Utilities 6,4003,400 Wholesale Trade Retail Trade 3,6005,900 Transportation, Warehousing and Utilities 2,100-2,000 Information Financial Activities Professional and Business Services -1,9004,100 Educational and Health Services -4001,500 Leisure and Hospitality 3,3007,300 Other Services -3001,300 Government -6,800-9,000 Federal Government -3,000-1,300 State Government -3,000-8,000 Local Government

Source: Alabama Department of Industrial Relations. Source: U.S. Bureau of Economic Analysis. Center for Business and Economic Research, The University of Alabama 10

Center for Business and Economic Research, The University of Alabama 11 Percent Change From Year Ago Change in Revenue from Year Ago Level TaxTotal Collection Total$7,479,875,8964.0%$290,488,033 Income (Individual)$2,880,218,3864.9%$134,778,934 Sales$1,670,289,0914.7%$75,106,878 Source: Alabama Department of Revenue.

Total Monthly Nonfarm Employment and Unemployment Rate Center for Business and Economic Research, The University of Alabama 12 Source: Alabama Department of Industrial Relations. Employment (Thousands), Unemployment Rate (Percent) January 1990 – July 2012 Nonfarm Employment Unemployment Rate

Center for Business and Economic Research, The University of Alabama 13 Total Annual Nonfarm Employment and Unemployment Rate Employment (Thousands), Unemployment Rate (Percent) Source: Alabama Department of Industrial Relations. Nonfarm Employment Unemployment Rate Employment Unemployment Rate

Change in Employment From the Beginning of the Recession Center for Business and Economic Research, The University of Alabama 14 Number of months (Number of Months)

Center for Business and Economic Research, The University of Alabama Index

Q compared to Q Center for Business and Economic Research, The University of Alabama 16

Center for Business and Economic Research, The University of Alabama 17 Q compared to Q Sales Profits

Center for Business and Economic Research, The University of Alabama 18 Q compared to Q Hiring Plans Capital Expenditures

Center for Business and Economic Research, The University of Alabama 19 Index

This Alabama GDP and employment forecast summary is the CBER July 2012 preliminary forecast Preliminary 2013 forecast included below Probability: Forecast (60 Percent) and Range (90 percent) CENTER FOR BUSINESS AND ECONOMIC RESEARCH, THE UNIVERSITY OF ALABAMA 20 (Percent change) Real GDP range0.5 to to to 3.5 Employment range0.1 to to 2.3 Total Tax Receipts, FY range3.5 to to 7.0

Center for Business and Economic Research, The University of Alabama 21 Source: Alabama Department of Industrial Relations, U.S. Bureau for Economic Analysis.

4/1/2000 to 4/1/2010 NumberPercent 4/1/2010ChangeChange Alabama4,779, , Anniston-Oxford118,572 6, Auburn-Opelika140,247 25, Birmingham-Hoover1,128,047 75, Decatur153,829 7, Dothan145,639 14, Florence-Muscle Shoals147,137 4, Gadsden104, Huntsville417,593 75, Mobile412,992 13, Montgomery374,536 28, Tuscaloosa219,461 27, Source: U.S. Census Bureau. Center for Business and Economic Research, The University of Alabama 22

Center for Business and Economic Research, The University of Alabama 23

Center for Business and Economic Research, The University of Alabama 24 Source: Alabama Department of Industrial Relations, Labor Market Information Division. July 2011July 2012 Alabama 9.6%9.0% Anniston-Oxford Auburn-Opelika Birmingham-Hoover Decatur Dothan Florence-Muscle Shoals Gadsden Huntsville Mobile Montgomery Tuscaloosa9.89.2

2007 or 2008 Job Loss to 2011 Nonfarm EmploymentPeak YearNumberPercent Alabama2,003, , Anniston-Oxford53,500-4, Auburn-Opelika54,800-2, Birmingham-Hoover531,300-43, Decatur58,500-5, Dothan63,100-7, Florence-Muscle Shoals57,300-1, Gadsden*38,100-2, Huntsville*214,300-6, Mobile*184,700-9, Montgomery179,200-13, Tuscaloosa*98,500-5, Net Jobs in Metropolitan Areas-102,400 Net Jobs in Nonmetro Counties -32,400 * Gadsden, Huntsville, Mobile, and Tuscaloosa employment peaked in 2008; all others saw peaks in Note: Nonfarm employment (jobs) is by place of work. Data are January to November averages. Source: Alabama Department of Industrial Relations and U.S. Bureau of Labor Statistics. Center for Business and Economic Research, The University of Alabama 25

Center for Business and Economic Research, The University of Alabama 26

Center for Business and Economic Research, The University of Alabama 27 Industry July 2012 employment Net change since July 2011 Total Nonfarm 87,300-2,400 Goods Producing 20, Natural Resources, Mining, and Construction 7, Manufacturing 13, Service Providing 67,000-2,100 Trade, Transportation, Warehousing, and Utilities 14, Wholesale Trade 2, Retail Trade 10,2000 -Transportation, Warehousing, and Utilities 2,3000 Information 9000 Financial Activity 3, Professional and Business Services 7, Education and Health Services 7, Leisure and Hospitality 8, Other Services 3,3000 Government 21,400-2,200 -Federal 1, State and Local 19,800-2,100 Source: Alabama Department of Industrial Relations

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Center for Business and Economic Research, The University of Alabama 29 Source: U.S. Department of Commerce, Alabama Department of Industrial Relations, and Center for Business and Economic Research, the University of Alabama.

Ahmad Ijaz Center for Business and Economic Research Culverhouse College of Commerce and Business Administration The University of Alabama Center for Business and Economic Research, The University of Alabama 30