Alabama Coastal Economy
Center for Real Estate Studies
Period ending July, 2011
Report found at http://cres.southalabama.edu
Mobile is the Economic Engine for Coastal Alabama
The Mobile Business Activity Index (MBAI) is an approximation of economic growth. It tracks employment for 10 NAICS industrial
clusters weighted by each industry’s personal income-per-worker. Movements in the index tract workforce purchasing power, and
provides a good cross-sectional analysis of the direction and strength of future business activity. The index equals 93.4 which
increased +0.8 over July, 2010.
Business activity in previous months shows that the local economy reached its lowest level in January, 2010, its highest level in March, 2007, and is currently performing at the level equal to May, 2009. MBAI Trend July 2011 95.37 95.31 June July 2010 92.57 92.69 Jan 2010 92.26 92.75 lowest Mar 2007 100.52 99.77 highest July 2007 98.60 99.29 July 2005 94.74 95.19 Labor Force Employment Feb 2011 186.7 166.8 July 2011 193.4 171.7 Total Mobile civilian employment rose 6,700 between February and July compared to 4,900 who found employment. Residential Investment: The residential market serves as an important indicator of consumer attitudes, expectations about the future economy, and job stability. The Mobile market has increasing sales, stable prices, and declining inventory. The highest volume of sales remains under $200,000. Total Sales Month’s to Sell Residential For Sale Median Sales Price Sales Under $200,000 July Number 295 11.88 3432 $110,000 245 Direction decline increase no change decline decline 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. University of South Alabama takes reasonable measures to ensure the quality of the data and other information produced. However, USA makes no warranty, express or implied, nor assumes any legal liability or responsibility for the accuracy, correctness, or completeness of any information, nor represents that its use would not infringe on privately owned rights. Reference to any specific commercial product, process, or service does not constitute an endorsement, recommendation, or favoring by USA.