CBER Says Alabama’s Economy Will Grow to 2.2 percent This Year

The Center for Business and Economic Research at the University of Alabama’s Culverhouse College of Business said Alabama’s economy will end 2018 with an impressive 2.2 percent growth rate compared with 2017, a 70 percent increase.

“After growing 1.3 percent in 2017, and 1.2 percent in the first quarter of the current year, the state’s (Gross domestic Product) will see an overall 2.2 percent growth in 2018,” the CBER said in its quarterly report. “The manufacturing sector is expected to have above-average growth.”

For the United States, the overall real GDP growth for 2018 will be 2.9 percent, the CBER said. “A strong labor market, a continued positive consumer sentiment, an increase in final sales and a steep decline in inventories gave a major boost to GDP growth, a trend that is expected to continue throughout the remainder of the year,” the CBER said.

Alabama will share in the growth. “As the national economy continues to gain momentum, Alabama’s real GDP will grow by 2.2 percent in 2018, to around $187 billion,” the CBER said.

The economy is adding jobs and is adding to school and general government taxes for Alabama.

From July 2017 to July 2018, Alabama added 22,200 nonagricultural jobs, compared to 16,100 jobs from July 2016 to July 2017. In Fiscal Year 2018, which ends Sept. 30, total state tax revenues are expected to grow 4.5 percent and 3.5 percent in the following fiscal year.

“The current robust (national) economic expansion that began in June 2009 is on track to become the longest in U.S. history,” the CBER said. “However, a number of pressing issues could derail the economy.”

Tariffs imposed by the U.S. government on various imported goods could lead to a decline in U.S. exports, such as Alabama-made passenger vehicles to China, and other European trade partners, which would have a significant negative impact on the economy of our state and beyond.

“Only time will tell the real economic impact of current trade policies,” the CBER said in its report.