University of Alabama Economists Optimistic About Growth in 2021
A report released earlier this month by economists at The University of Alabama shows optimism about a post-pandemic buying boom and projects the state's economy will grow by 2.6% in 2021.
“It will be a couple of years before we get back to pre-pandemic level economic activity, or perhaps even longer for some sectors of the economy,” said Ahmad Ijaz, executive director of the Center for Business and Economic Research at UA. “We are in a sort of recovery mode right now, but, hopefully, we will be in expansion mode by the second half of the year.”
According to a University spokesperson, the Culverhouse College of Business's Center for Business and Economic Research "has produced forecasts of economic activity in Alabama since 1980."
These forecasts, which are updated quarterly and published in the annual Alabama Economic Outlook cover the state’s gross domestic product, rate of employment and industrial income.
This year's outlook includes a special look into how the pandemic impacted Alabama's economy authored by Dr. Nyesha Black, director of socioeconomic analysis and demographics.
As usual, the outlook also dives into the national and state economy and examines conditions in Birmingham, Montgomery, Huntsville, Mobile and Tuscaloosa.
Ijaz said that before the pandemic, Alabama's economy was expanding around 1.5% to 2% annually. The report shows that in 2020 the economy declined by 2.7% because of COVID-19.
The report also predicts the state's employment will rise by 1.5% in 2021, reversing a decline of 3.4% from Sept. 2019 to Sept. 2020,
Alabama's 2021 economic growth will be driven by many sectors, including "the financial services industry, residential construction, auto and other transportation equipment manufacturing, along with professional and business services in the scientific and technical services, waste management and administrative services."
Ijaz said that while the economy is recovering Alabama needs more assistance from Congress and the Federal Reserve.
“Federal intervention would definitely help, especially to some sectors of the economy that employs relatively low-skill, low-wage labor, who have primarily felt the major brunt of the recession,” he said.