Alabama Coastal Economy
Center for Real Estate Studies
Period ending May, 2012
Report found at http://cres.southalabama.edu
Mobile is the Economic Engine for Coastal Alabama
Three views of the Coastal Alabama economy provide a good cross-sectional analysis of the direction and strength of
future activity. The Mobile Business Activity Index (MBAI) is an approximation of economic growth. It tracks employment for
10 NAICS industrial classifications weighted by each industry’s personal income-per-worker. It shows the level of workforce
spending power in the economy. The index increased by 1.15 percent from January to May.
MBAI and Moving Average
Index
January 2006 - May 2012
3 Month Moving Average
104
102
100
Index
98
96
94
92
90
88
86
2006
2007
2008
2009
2010
2011
2012
Employment: According to the latest labor statistics, the civilian labor force was 189,613 in May, 2012. The number of
workers employed increased by 0.94 percent since January, 2012, and the number of unemployed workers decreased by
5.43 percent in the same period. The latest unemployment rate is 8.5 percent for May, which, compared to May, 2011, is a
decrease by 14.14 percent.
Employment in the top six clusters driving the economy increased by 1.85 percent from January to May. Employment in the
remaining four clusters increased from 32,200 to 32,700, a 1.55 percent change. From January to May, employment
increased in all sectors except Information, which remained at 2,100.
Rank
Mobile Employment Clusters
%
1
2
3
4
5
6
Trade, Trans, & Utilities
Government
Education & Health Services
Prof & Business Services
Manufacturing
Leisure & Hospitality
Sub-Total
Financial Activities
Mining, Logging, Construction
Other Services
Information
Total
21.7%
14.9%
13.6%
12.8%
9.4%
9.0%
81.4%
6.1%
6.0%
5.3%
1.2%
100.0%
7
8
9
10
Non-farm Employees
Jan. (000’s) May
37.8
38.2
26.2
26.3
23.8
24.0
22.3
22.5
16.1
16.5
14.6
15.9
140.8
143.4
10.6
10.7
10.3
10.5
9.2
9.4
2.1
2.1
173.0
176.1
% Change vs. 12
Months Earlier
1.1
-2.6
1.7
1.4
3.1
0.6
-4.5
-10.3
1.1
0.0
Residential Investment: The residential market serves as an important indicator of consumer attitudes, expectations
about the future economy, and job stability. As of May, the Mobile housing market has increasing sales and prices, and
decreasing month’s-to-sell inventory. The highest volume of sales remains under $200,000.
Total Sales
Month’s-to-sell Inventory
Average Sales Price
Median Sales Price
Sales Under $200,000
May
Direction
344
8.83 months
$131,756
$115,000
292
increase
decrease
increase
increase
increase
The Future: The immediate future for the Coastal economy lies in two areas. The first is continued economic development
successes. The Center estimates that the new Navy contract awarded to AUSTAL and the new Stainless Steel plant will
add approximately 8,600 jobs to the local economy. Both will cause the economy to expand which will drive the MBAI
upward.
The second will be new legislation from Congress to encourage the purchase of housing. The real estate market led the
economy into the recent recession, and it should lead us out due to the significant amount of interaction of real estate
activity with other areas of the economy. For example, Congress should enact another tax credit. Continuation of the
mortgage interest deduction is important. A proposed 20 percent down payment should be reduced to 10 percent.
The local residential market will not return to a market dominated by demand and supply until the number of foreclosures
has been significantly reduced. Most likely, the new paradigm fueled by foreclosures will last through 2011.
For additional information, contact: Dr. Don Epley, Director, Center for Real Estate Studies, University of South
Alabama, Office: 251.460.6735, E-mail: depley@usouthal.edu.
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