Fed says state growth in '07 to be modest
By Eric Fleischauer
firstname.lastname@example.org · 340-2435
Alabama's economy strengthened in 2006, but its growth in 2007 will be modest, according to a report released Wednesday by the Federal Reserve Bank of Atlanta.
The most promising developments it mentioned, however, generally were in Huntsville.
In 2006, the state's employment grew 1.5 percent, about the same as the national average, and its average unemployment rate of 3.6 percent was the lowest the state has seen in 30 years. The unemployment rate was significantly lower than the national average.
The Fed said the state's defense industry and transportation equipment industry would highlight economic growth in 2007, with automobile manufacturing — particularly suppliers for the new Kia Motors plant in West Point, Ga. — also expected to play a major role. Shipbuilding is also on the rise, the report said.
The housing market struggled statewide, but was strong in the Huntsville area, which saw 19 percent growth. Birmingham's housing market grew by 11 percent, Montgomery's was flat and the Mobile-Baldwin County market dropped by 27 percent.
The report mentioned Redstone Arsenal's ongoing expansion as a major factor in its forecast for increased housing sales in and around Huntsville in 2007.
Another Huntsville positive it mentioned was the planned Verizon Wireless facility, which will employ 1,300.
"Additionally," the report said, "the expanding defense industry in northern Alabama will continue to attract new business to the state."
The report also mentioned the economic benefit to Huntsville of a planned $30 million Lockheed Martin Corp. expansion.
Nondurable goods manufacturing was weak in 2006, with employment falling 2 percent. Worst hit in this category were apparel mills — an industry concentrated in North Alabama — which saw a 10 percent drop in employment.
Statewide, real per capita income grew 3.4 percent in the first half of 2006, the report said.
"This solid growth has helped close the income gap between Alabama and the nation as a whole," the report said, "putting Alabama's per capita income at 86 percent of the national average, the state's highest reading on record."
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