Alabama economy expected to contract 3.4%, rebound possible
Pounded by the coronavirus pandemic, Alabama’s economy will contract 3.4% this year but could be on a normal trajectory toward recovery by the first half of 2021, according to a forecast by the University of Alabama. The assessment by economists Samuel Addy and Ahmad Ijaz said the state’s future will rest in part on how government policymakers respond to COVID-19 and how well households weather the pandemic. But Ijaz told al.com the outlook is better than what was expected in the spring because the state’s decline during the second quarter wasn’t as bad as had been feared. “When we forecasted it back then, we were expecting the economy to drop by around 6 to 7% for the year with a sharp decline in the second quarter and then a sharp increase in the third quarter, but the drop in the second quarter was around 29% instead of 30 to 35% we were expecting,” Ijaz said. The state’s economy grew by 2.4% and 2.8% over the last two years but took a downturn once the virus flared up in March. The analysis provides a look at how the pandemic brought most economic activity to a halt in the spring before some restrictions were lifted. Yet segments of the economy still remain at risk of significant declines, the analysis warned, including travel-related businesses, food service, automotive-related businesses, education, and manufacturing. Almost 1.2 million people, or nearly 60% of state’s non-farm workforce, are employed in such occupations, and how those sectors rebound will determine how the state recovers. “Furloughs and layoffs will be common. The expected significant declines in economic activity will adversely affect income, sales, lodging, gas, and other tax revenues for both state and local government entities,” the report said. Republished with the permission of the Associated Press
Samford’s annual economic impact $424.8 million, study says
Samford University’s estimated annual economic impact on the state of Alabama is more than $424.8 million, according to a study released Wednesday. The independent study was conducted by Samuel Addy and Ahmad Ijaz with the Center for Business and Economic Research at the University of Alabama. For 2016-17, the most recent year for which complete data was available, Samford’s economic and fiscal impact was $424.8 million, 2,424 jobs and $16.1 million in state and local income and sales taxes. Betsy Bugg Holloway, Samford’s vice president for marketing and communication, said the report affirms the ways the university contributes to economic development through teaching, research and service. The majority of Samford’s impact – $384.1 million, 2,172 jobs and $5.2 million in local sales tax revenue – is in the Birmingham-Hoover metropolitan area. This includes an annual economic impact of $18.5 million from visitors to the university’s campus in Homewood. The university regularly hosts visitors from around the state, country and world to attend its athletics, arts and educational events. Samford University is a high-yielding investment for its students, a new report says. (Michael Sznajderman/Alabama NewsCenter) “Samford University is an attractive investment for its graduates and clearly contributes to the state of Alabama and the Birmingham-Hoover metro area economies,” the report states. “In addition, Samford provides many other public and private benefits that, while difficult to quantify, clearly make it a great asset for the state and the metro area.” The report also found that the state gains indirectly because Samford graduates pay higher taxes than they would have without their Samford degrees. “Over the working life of the 2016-17 graduating class, the Samford education will provide higher income that enables generation of $258.7 million additional income and sales taxes – $181.5 million in state sales and income tax collections and $77.2 million local sales taxes,” the report states. According to the study, “a Samford education is a very high-yielding investment for students.” The real annual rate of return on some college attendance is 7.1 percent over a high school graduate. The bachelor’s degree has a 9.2 percent real annual rate of return over some college attendance, and the master’s degree yields a 15.7 percent return over a bachelor’s degree. The doctorate provides a 12.2 percent marginal return over the master’s degree. About 39 percent of Samford students are enrolled in graduate and professional programs, Holloway said. New programs at Samford are preparing health and business students for fast-growing, in-demand career fields. (Samford University) The university has lasting impact on graduates and the general public through service and outreach programs. Through job creation, generation of tax revenues, promotion of innovation, assisting in business creation and growth and facilitation of economic development, Samford is making the metro area and the state “attractive for the startup, location and expansion of business and industry,” the study says. These benefits lead to improvement of workforce skills and the general quality of life, it says. In recent years, Samford has placed particular emphasis on developing new programs designed to meet the needs of today’s workforce. According to Holloway, new programs in the College of Health Sciences and an emphasis on data analytics throughout Samford’s Brock School of Business are equipping graduates to succeed in some of the fastest-growing and most in-demand career fields. “Samford’s commitment to developing new programs and evolving existing programs to meet the needs of our students, and the communities we serve, is undoubtedly a factor in Samford’s increasing economic impact,” Holloway said. An independent study conducted in 2014 found Samford’s impact for 2012-13 to be more than $335 million. A link to the full 2016-17 report is available on the Samford website. Republished with the permission of the Alabama Newscenter.
