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Income growth fades in Decatur

By Eric Fleischauer 340-2435

Personal income growth faded in Decatur in 2006, increasing at a rate slower than in 2005 and slower than the U.S. average in 2006.

"What bothers me is that a year ago Decatur was ahead of the national average; now it's behind," said Jeff Thompson, a senior economist at The University of Alabama in Huntsville's Office for Economic Development. "That's nothing to panic about, but this is definitely not what we want to see."

According to figures released Tuesday by the U.S. Bureau of Economic Analysis, personal income in Decatur Metropolitan Statistical Area, which includes Morgan and Lawrence counties, grew by 5.2 percent from 2005 to 2006. That was down from 5.4 percent in the 2004-05 period.

The national average for 2005-06 income growth was 6.4 percent. The national average for metropolitan areas was 6.6 percent. In 2004-05, the national average was 5.2 percent.

In Alabama, only Gadsden MSA and Columbus, Ga., MSA (which includes Alabama territory) grew slower than Decatur MSA.

Huntsville MSA, which includes Madison and Limestone counties, saw personal income growth of 7.7 percent, up from 7.4 percent in the 2004-05 period.

"Decatur has a heavy manufacturing base, and manufacturing is struggling," said Thompson.

The ills of heavy manufacturing may be here to stay as globalization undermines manufacturers who seek to compete on price.

"The indicators suggest that heavy industries — those producing commodities — are going to go away," Thompson said. "You can build it cheaper outside the United States and ship it here."

Maintaining income growth despite increasing pricing pressures on commodity manufacturers will require more high-tech or value-added production in Decatur, Thompson said.

The strongest growth sector, according to the BEA, was in professional and technical services.

"Those areas make up for a lot of jobs in the Huntsville area," Thompson said. "I'm sure that accounted for a lot of its growth. Decatur is more spread out across a number of industry areas."

High energy costs could have put a damper on Decatur personal income, Thompson said, as manufacturers feared a drop in profits. He expects such wage-suppressing issues gradually to take a back seat to upward wage pressure caused by low unemployment rates in Decatur and throughout North Alabama.

MSA's per capita

Decatur MSA's per capita personal income in 2006 was $30,695, placing it 211th of the 363 MSAs in the nation. It was $29,436 in 2005.

Huntsville MSA's per capita income in 2006 was $35,196, up from $33,403 in 2005. It was 104th in the nation and second only to the Birmingham-Hoover area in the state.

Decatur MSA's per capita income was the sixth highest of 12 MSAs in the state. The lowest in the state, at $26,034, was in the Auburn-Opelika area. Not only was Birmingham-Hoover highest in the state at $37,635, it is growing at an annual clip of 6.7 percent.

Florence-Muscle Shoals, which at $27,520 has a lower per capita income than Decatur, grew at a faster 6.1 percent rate.

Decatur leaders have hoped for a boost in population and personal income from the ongoing Redstone Arsenal expansion.

That expansion is not expected to be complete until 2011, however, and Thompson said it probably won't show up as a significant factor in BEA numbers until 2013.

"You'll see it eventually," he said, "but it will be a few years."

Alabama income

Per capita personal income in the Decatur Metropolitan Statistical Area, which includes Morgan and Lawrence counties, was sixth among the 12 metropolitan areas in the state. The 2006 rankings:

  • Auburn-Opelika $26,034

  • Florence-Shoals $27,520

  • Gadsden $27,782

  • Mobile $27,798

  • Anniston-Oxford $29,584

  • Dothan $30,114

  • Decatur $30,695

  • Columbus, Ga.-Ala. $31,051

  • Tuscaloosa $31,395

  • Montgomery $33,769

  • Huntsville $35,196

  • Birmingham-Hoover $37,635

    Source: Bureau of Economic Analysis

    Eric Fleischauer

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