Evans Head, Student, Samford University (Accounting & Management) Economic Overview Evans Head, Student, Samford University (Accounting & Management)
Discussion Points National Economy Birmingham Economy (Metro Area)
“Economy” the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.
How do we measure the economy? *Access to credit* Ray Dalio, How the Economic Machine Works
Cycles
“Where are we in the cycle?” Ray Dalio, How the Economic Machine Works
5 Economic Relationships 1. As price goes up, demand goes down. 2. As price goes up, supply goes up. 3. As interest rates go up, investment goes up. 4. As the supply of money goes up, interest rates go down. 5. As economic growth goes up, unemployment goes down. Money Supply > Interest Rates > Investment > Productivity > Employment
Economic Performance Indicators Projections National Economy
Economic Performance Indicators Real GDP:
Economic Performance Indicators Consumer Price Index (CPI)
Economic Performance Indicators CPI - all items & CPI - Housing
Economic Performance Indicators CPI - all items & CPI - Housing
Economic Performance Indicators Current Employment Statistics: Unemployment
Economic Performance Indicators Consumer Confidence:
Economic Performance Indicators Current Employment Statistics: Wages
So, why is this happening? Federal Funds Rate
Housing units started & Federal Funds Rate
10-Yr Treasury Rate minus 2-Yr Treasury Rate What else is going on? 10-Yr Treasury Rate minus 2-Yr Treasury Rate
Ownership vs “Rentership” Housing: Ownership vs “Rentership” Pew Research Center
Share of households who choose to rent Housing: Share of households who choose to rent Pew Research Center
Future Projections Federal Funds Rate increases Inflation increase Geopolitical tensions Increase in housing rental as consumer taste changes
Birmingham Economy
Defining the “Birmingham Metro Area” Seven Counties: Jefferson Shelby Chilton Blount St. Clair Walker Bibb
METRO MONITOR
Metro Monitor 2018, Brookings Institute Growth Prosperity
Percent Change in Employment Rate (2011-16)
BMA Population since 1993
Local Industries Healthcare Banking Manufacturing Companies based in Birmingham: (largest employers in the state, large market-cap companies): Manufacturing: ACIPCO McWane, Inc. Vulcan Materials Company Drummund Co, Inc. O’Neal Industries Healthcare: UAB - The largest employer in the state (23,000) Encompass Health (formerly Healthsouth) Banking: Regions Bank - 8th largest US bank by assets BBVA Compass A dozen other banks Insurance: BCBS of Alabama Protective Life Insurance Other: Brasfield & Gorrie (construction) Buffalo Rock Company - Founded in 1901; producer for Pepsi Coca-Cola Bottling Company United - Founded in 1902; 3rd largest bottler of Coke products in the US. EBSCO
Future Projections Manufacturing tightening from trade tensions Birmingham should follow national swings
Evans Head, Samford University Thank you Evans Head, Samford University
Questions?