1. 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 http://cber.cba.ua.edu(205) 348-6191

2. Economic recovery has lost momentum, but has not come to a halt Inventory cycle caused relatively strong growth in late 2011 and early 2012 2.1 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

3. 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

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

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

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

7. Source: IHS Global Insight, August 2012. (Percent change unless otherwise noted) 20092010201120122013 Real GDP-3.53.01.72.11.8 Consumption-1.91.82.51.92.1 Residential Investment-22.2-3.7-1.411.611.2 Commercial, Healthcare Structures-30.7-25.0-2.36.54.9 Nonresidential Fixed Investment-18.10.78.6 4.8 Federal Government6.14.5-2.8 -3.1 State & Local Government2.2-1.8-3.4-1.7-0.9 Exports-9.111.16.74.04.3 Imports-13.512.54.83.73.8 Payroll Employment-4.4-0.71.21.4 Unemployment Rate9.39.69.08.28.0 CPI Inflation-0.31.63.12.01.6 Light Vehicle Sales (Millions)10.4011.5512.7314.1314.81 Center for Business and Economic Research, The University of Alabama 7

8. 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.

9. 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 400-200 Construction -8,800-6,300 Manufacturing 1,5003,400 Durable Goods Manufacturing 2,3003,900 Nondurable Goods Manufacturing -800-500 Trade, Transportation and Utilities 6,4003,400 Wholesale Trade 700-500 Retail Trade 3,6005,900 Transportation, Warehousing and Utilities 2,100-2,000 Information -800-700 Financial Activities 700900 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 -800300

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

11. 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.

12. 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

13. Center for Business and Economic Research, The University of Alabama 13 Total Annual Nonfarm Employment and Unemployment Rate Employment (Thousands), Unemployment Rate (Percent) 1990-2012 Source: Alabama Department of Industrial Relations. Nonfarm Employment Unemployment Rate Employment Unemployment Rate

14. 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)

15. Center for Business and Economic Research, The University of Alabama 15 31.5 50.2 Index 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

16. Q3 2012 compared to Q2 2012 Center for Business and Economic Research, The University of Alabama 16

17. Center for Business and Economic Research, The University of Alabama 17 Q3 2012 compared to Q2 2012 Sales Profits

18. Center for Business and Economic Research, The University of Alabama 18 Q3 2012 compared to Q2 2012 Hiring Plans Capital Expenditures

19. Center for Business and Economic Research, The University of Alabama 19 Index 2010 2011 2012

20. 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) 2010201120122013 Real GDP2.31.52.02.1 range0.5 to 2.51.5 to 3.01.8 to 3.5 Employment-0.8-0.20.51.5 range0.1 to 1.50.7 to 2.3 Total Tax Receipts, FY-2.55.04.04.1 range3.5 to 4.53.0 to 7.0

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

22. 4/1/2000 to 4/1/2010 NumberPercent 4/1/2010ChangeChange Alabama4,779,736 332,6367.5 Anniston-Oxford118,572 6,3235.6 Auburn-Opelika140,247 25,15521.9 Birmingham-Hoover1,128,047 75,8097.2 Decatur153,829 7,9625.5 Dothan145,639 14,77811.3 Florence-Muscle Shoals147,137 4,1872.9 Gadsden104,430 9710.9 Huntsville417,593 75,21722.0 Mobile412,992 13,1493.3 Montgomery374,536 28,0088.1 Tuscaloosa219,461 27,42714.3 Source: U.S. Census Bureau. Center for Business and Economic Research, The University of Alabama 22

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

24. 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-Oxford9.89.4 Auburn-Opelika7.88.1 Birmingham-Hoover8.87.9 Decatur9.38.7 Dothan8.78.4 Florence-Muscle Shoals9.18.6 Gadsden9.88.8 Huntsville8.17.7 Mobile10.710.1 Montgomery9.48.9 Tuscaloosa9.89.2

25. 2007 or 2008 Job Loss to 2011 Nonfarm EmploymentPeak YearNumberPercent Alabama2,003,800-134,800-6.7 Anniston-Oxford53,500-4,800-9.0 Auburn-Opelika54,800-2,200-4.0 Birmingham-Hoover531,300-43,200-8.1 Decatur58,500-5,100-8.7 Dothan63,100-7,000-11.1 Florence-Muscle Shoals57,300-1,800-3.1 Gadsden*38,100-2,900-7.6 Huntsville*214,300-6,600-3.1 Mobile*184,700-9,800-5.3 Montgomery179,200-13,200-7.4 Tuscaloosa*98,500-5,800-5.9 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 2007. 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

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

27. 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 20,300-300 Natural Resources, Mining, and Construction 7,300-400 Manufacturing 13,000100 Service Providing 67,000-2,100 Trade, Transportation, Warehousing, and Utilities 14,500200 -Wholesale Trade 2,000200 -Retail Trade 10,2000 -Transportation, Warehousing, and Utilities 2,3000 Information 9000 Financial Activity 3,400-100 Professional and Business Services 7,800100 Education and Health Services 7,200-200 Leisure and Hospitality 8,500100 Other Services 3,3000 Government 21,400-2,200 -Federal 1,600-100 -State and Local 19,800-2,100 Source: Alabama Department of Industrial Relations

28. 28 Center for Business and Economic Research, The University of Alabama

29. 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.

30. Ahmad Ijaz Center for Business and Economic Research Culverhouse College of Commerce and Business Administration The University of Alabama http://cber.cba.ua.edu(205) 348-6191 Center for Business and Economic Research, The University of Alabama 30