1. Ahmad Ijaz Center for Business and Economic Research The University of Alabama 28 th Annual Economic Outlook Conference January 14, 2016

2. 2 Alabama Employment (2011-2015) Source: Alabama Department of Labor, Labor Market Information Division. January 2011 November 2015 Change Total Nonagricultural 1,839,4001,975,700136,300 Mining and Logging 12,10010,400-1,700 Construction 77,20084,2007,000 Manufacturing 233,200251,50018,300 Durable Goods Manufacturing 143,500166,20022,700 Nondurable Goods Manufacturing 89,70085,300-4,400 Trade, Transportation and Utilities 358,800386,30027,500 Wholesale Trade 70,90071,9001,000 Retail Trade 221,500239,80018,300 Transportation, Warehousing and Utilities 66,40074,6008,200 Information 23,50022,200-1,300 Financial Activities 91,10097,0005,900 Professional and Business Services 208,200232,50024,300 Educational and Health Services 213,200234,80021,600 Leisure and Hospitality 159,500191,50032,000 Other Services 78,40080,9002,500 Government 384,200384,400200 Federal Government 57,20054,000-3,200 State Government 110,400112,9002,500 Local Government 216,600217,500900

3. 3 Monthly Employment Indicators (November 2015) Not Seasonally Adjusted Seasonally Adjusted Civilian Labor Force2,150,6852,146,294 Percent Change from Year Ago Level0.5%0.8% Absolute Change from Year Ago Level11,59416,163 Employed2,029,1832,018,189 Percent Change from Year Ago Level0.6%0.9% Absolute Change from Year Ago Level12,92318,967 Unemployed121,502128,105 Percent Change from Year Ago Level-1.1%-2.1% Absolute Change from Year Ago Level-1,329-2,804 Alabama Unemployment Rate5.6%6.0% Alabama Unemployment Rate (Nov. 2014)5.7%6.1% U.S. Unemployment Rate4.8%5.0% U.S. Unemployment Rate (Nov. 2014)5.5%5.8% Source: Alabama Department of Labor, Labor Market Information Division. Note: 24% of workers are underemployed, about 487,000.

4. 4 Labor Force Participation Rate (Annual) Source: Bureau of Labor Statistics.

5. 5 November 2013 to November 2014 November 2014 to November 2015 Total Nonagricultural 31,50024,900 Mining and Logging -200-1,300 Construction 8004,700 Manufacturing 3,400-3,000 Durable Goods Manufacturing 5,600-700 Nondurable Goods Manufacturing -2,200-2,300 Trade, Transportation and Utilities 4,3004,800 Wholesale Trade 0-1,400 Retail Trade 3,6004,000 Transportation, Warehousing and Utilities 7002,200 Information -6000 Financial Activities 2002,000 Professional and Business Services 9,1004,200 Educational and Health Services 3,7005,900 Leisure and Hospitality 6,1006,400 Other Services 2,000-300 Government 2,7001,500 Federal Government -300600 State Government 1,400800 Local Government 1,600100 Alabama Nonagricultural Employment Change in Number of Jobs Source: Alabama Department of Labor, Labor Market Information Division.

6. 6 Total Annual Nonfarm Employment and Unemployment Rate Employment (Thousands), Unemployment Rate (Percent), 1990-2015 Source: Alabama Department of Labor. Nonfarm Employment Unemployment Rate Employment Unemployment Rate

7. 7 Change in Alabama Employment From the Beginning of the Recession Number of months Source: Alabama Department of Labor Statistics and Center for Business and Economic Research, The University of Alabama.

8. 8 Tax Revenues (FY2016, Year-to-Date December) Source: Alabama Department of Revenue. Percent Change From Year Ago Change in Revenue from Year Ago Level TaxTotal Collection Total$2,383,733,6410.8%$18,651,051 Income (Individual)$897,482,7965.9% $49,818,978 Sales$554,516,2394.6%$24,242,856

9. 9 Alabama Manufacturing Employment Annual Percent Change Source: Alabama Department of Labor Statistics and Center for Business and Economic Research, The University of Alabama.

10. 10 6 th in U.S. in vehicle exports (2015, Through November) 4 OEMs in the state (Original Equipment Manufacturers) 5 th in U.S. in vehicles manufactured Alabama’s three assembly plants produced over a million vehicles in 2015 $8.7 billion in transportation equipment exports, $7.3 billion in vehicle and vehicle parts exports in Source: U.S. Census Bureau, Economic Development Partnership of Alabama and Center for Business and Economic Research, The University of Alabama. Manufacturing – Automotive Industry

11. 11 Source: U.S. Bureau of Economic Analysis and IHS Global Insight.

12. 12 Alabama Construction Employment Annual Percent Change Source: Alabama Department of Labor Statistics and Center for Business and Economic Research, The University of Alabama.

13. 13 Source: Bureau of Economic Analysis and IHS Global Insight.

14. 14 Source: Bureau of Labor Statistics and Center for Business and Economic Research, The University of Alabama.

15. 15 Source: Bureau of Labor Statistics, QCEW.

16. 16 Source: Bureau of Labor Statistics and Center for Business and Economic Research, The University of Alabama.

17. 17 Source: Bureau of Labor Statistics, QCEW.

18. 18 Source: Bureau of Labor Statistics.

19. 19 Source: BEA and IHS Global Insight.

20. ABCI TM 20

21. ABCI TM History 21 68.7 31.5 53

22. U.S. and Alabama Economies Expectations versus Prior Quarter 22

23. 23 Sales and Profits Expectations versus Prior Quarter

24. 24 Hiring and Capital Expenditures Expectations versus Prior Quarter

25. ABCI by Metro Area Q1 2016 compared to Q4 2015 49

26. 26 Metro Share of State GDP, 2014 Source: U.S. Bureau of Economic Analysis and Center for Business and Economic Research, The University of Alabama.

27. 27 Total Employment Note: Total employment is by place of residence. October 2015 preliminary not seasonally adjusted data. Source: Alabama Department of Labor and Bureau of Labor Statistics.

28. 28 Four metros past 2007/2008 annual peak in November 2015 * Gadsden, Huntsville and Mobile employment peaked in 2008; all others saw peaks in 2007. Note: Nonfarm employment (jobs) is by place of work. Source: Alabama Department of Labor and U.S. Bureau of Labor Statistics. 2007 or 2008 Job Loss to 2014 Nonfarm EmploymentPeak YearNumberPercent Alabama 2,005,70030,0001.50% Anniston-Oxford 53,4006,90012.92% Auburn-Opelika 54,800-7,400-13.50% Birmingham-Hoover 533,4009,2001.66% Daphne-Fairhope-Foley 66,800-2,400-3.59% Dothan 63,1005,3008.40% Florence-Muscle Shoals 57,3001,4002.44% Gadsden* 38,00000.00% Huntsville* 214,300-6,600-3.08% Mobile* 184,6007,8004.23% Montgomery 178,0006,3003.54% Tuscaloosa 98,500-8,800-8.93% Net Jobs in Metropolitan Areas 16,300 Net Jobs in Nonmetro Counties 13,700

29. 29 Educational Attainment 2014 Source: U.S. Census Bureau, 2014 American Community Survey 1-year estimates.

30. 30 Income and Wages Source: U.S. Bureau of Economic Analysis. Per Capita Income 2014

31. 31 Median Family Income FY2015 Source: U.S. Department of Housing and Urban Development, Office of Economic Affairs, Economic and Market Analysis Division.

32. 32 Percent Change in New Home Construction (January to September 2015) Source: Alabama Center for Real Estate, The University of Alabama

33. 33 Manufacturing Note: October 2015 preliminary not seasonally adjusted data. Source: Alabama Department of Labor and U.S. Bureau of Labor Statistics.

34. 34 Total Service Providing Industries, Percent of Area Jobs Note: September 2015 preliminary, not seasonally adjusted data Source: Source: Alabama Department of Labor and U.S. Bureau of Labor Statistics, Center for Business and Economic Research

35. 35

36. Top issues that Alabama is facing: 36 Source: Center for Business and Economic Research, ABCI Panelists’ Poll, Nov. 2015. 1 State Budget & Government Leadership State & local government; balanced budget; leadership; tax reform; state constitution 2 Education | Training | Skilled Workforce Quality of public education; workforce development; lack of skilled workers 3Economy / Business Economic & business growth; small business development 4Job Growth Job growth; better quality/paying jobs 5Healthcare Costs Healthcare costs; Affordable Care Act; Medicare, Medicaid; mental health care funding 6Infrastructure Improvement Highways; road funding

37. 37 Top Issues Facing Companies in Alabama Source: Center for Business and Economic Research, ABCI Panelists’ Poll, Nov. 2015. 1Company Finances & Development Profitability; business costs; sales; business growth; competition; emerging technologies 2/3Government Regulations & Taxes Federal, state, and local government; taxation; regulations; programs for small businesses; uncertainty 2/3Workforce Lack of qualified workers 4Economy Economic recovery & growth 5Healthcare Costs Healthcare costs; Affordable Care Act

38. Labor force participation (2014): Alabama 57.7% United States 63.3% Educational Attainment (Age 25 and over population) 2010-2014 (2014)AlabamaUnited States High school graduates83.7% (84.7%)86.3% (86.9%) Bachelor’s or higher degree23.1% (23.5%)29.3% (30.1%) Population GrowthAlabamaUnited States 1990-200010.1%13.2% 2000-20107.5%9.7% 2010-20151.6%4.1% Alabama has lower labor force participation, population growth, and educational attainment than the nation 48

39. 39 GDP and Nonfarm Employment Forecasts, 2016 Source: U.S. Department of Commerce, Alabama Department of Labor, and Center for Business and Economic Research The University of Alabama, December 2015.

40. Alabama Forecast Summary 40 Alabama GDP, Employment and Tax Receipts (December 2015 forecast) (Percent change) 2013201420152016 Real GDP1.92.02.42.3 range1.8 to 2.51.5 to 3.0 Employment0.91.11.21.0 range1.0 to 1.40.8 to 1.5 Total Tax Receipts, FY4.01.34.03.3 range2.0 to 4.5