Alabama Metropolitan Areas

Transcription

1 Alabama Metropolitan Areas As 2009 unfolded and the economic well-being of Alabama s citizens and businesses fell, it might have been preferable to fast forward over the recession that gripped the state to better times that should be on the horizon later in But then we would have missed all the groundwork that was laid during the year the economic development, capacity and infrastructure building, workforce training, and process improvement that will increase the competitiveness of our existing industry and help us respond quickly and successfully to new opportunities. And we would have missed the successes, particularly in the healthcare sector. Every part of the state faced hardship while the 11 metro areas shed 50,700 jobs (-3.3 percent) during the 12 months ending in October, the 41 nonmetro counties lost 44,900 (-9.6 percent) but all will emerge stronger as the recovery takes hold. Anniston-Oxford Stability in national defense-related activity and health services was not enough to keep the Anniston-Oxford area economy from continuing to slip in Job declines took hold in the metro relatively early in the recession, with nonagricultural employment below year-ago levels since January 2008 (with the exception of June 2008). At 51,100 in October 2009, payroll jobs in the area were down 1,800 (-3.4 percent) from a year ago. Manufacturing saw the steepest decline during the year, losing 600 positions, while state and local government shed 400. Educational and health services added 100 jobs and federal government employment was flat. Workers who commuted outside the area were hit harder, with total employment dropping by about 4,250 (-8.3 percent) between October 2008 and October Challenging conditions for the auto industry negatively impacted employment of area residents at Honda and nearby suppliers. During this same period, Anniston- Oxford s labor force contracted by just 3.1 percent and unemployment soared to 11.2 percent, highest among the 11 metros. Still, the economy of the Anniston-Oxford metro has been growing at a faster pace than the state since The area s current dollar GDP (total output of goods and services) climbed 61.8 percent from 2001 to 2008, with an above-average gain of 4.5 percent in 2008 ranking fourth among the state s metros. Government plays an important role in the Anniston-Oxford economy 28.2 percent of area GDP was generated by this sector in 2008 versus 16.3 percent for the state; government has been the most rapidly growing output sector since Manufacturing accounted for a slightly above average 13.5 percent of jobs in the Anniston-Oxford metro in October 2009, far below its 19.3 percent share 10 years ago. Anniston Sportswear closed its doors in August, with the loss of 160 jobs, and the Hager Hinge facility in Oxford shut down in late October, claiming 93 positions. Ashland s Wellborn Cabinet laid off another 200 workers in January to bring total layoffs since January 2008 to 440, as the company continued to position its product lines and services for a turnaround in the housing industry. Federal government contract work balanced job cuts and additions during the year BAE Systems reported layoffs of 130 employees in February and about 140 at the end of November and SAIC cut 90 in late April. But BAE also received several contract awards during 2009 and General Dynamics planned to hire up to 100 for a new contract late in the year. North American Bus Industries, which added 100 workers in 2008, saw strong orders for its products during the year. New auto supplier Industry Products will open in the county s spec building in January 2010 and begin supplying parts to Honda with about 25 workers by the summer. Leggett and Platt subsidiary Garcy leased a large section of warehouse space at the former Springs Global facility in Piedmont. Ongoing investment at the Anniston Army Depot is supporting its role as a mainstay of the Anniston-Oxford economy, with about 7,300 employees and contractors. Work is continuing on a $26 million wastewater treatment 18 Alabama Metropolitan Areas

2 plant that will be complete in The $85 million Powertrain Flexible Maintenance Facility opened in August, while the Depot broke ground this fall for a new Small Arms Repair Facility. Work began in December on a $7.5 million contract with the Research Triangle Institute to produce M1 tank training devices. National security-related activity is a primary focus of the former Fort McClellan, while servicerelated activity is growing. Alagasco will relocate its operations center to McClellan in 2010 and the Coosa Valley Resource Conservation and Development Council has plans to move and develop facilities there. Ordnance clean-up was completed in the vicinity of the industrial access road that will connect McClellan to the new Eastern Parkway, opening the way for further industrial and commercial development. Anniston s role in providing medical services in East Alabama was enhanced with the award of Level 2 trauma designation to Regional Medical Center. The retail scene was challenged by the closing of Goody s Family Clothing, Circuit City, and Food Max stores, as well as several restaurants. Walgreens opened in Jacksonville and Anniston during the year and a Sam s Club under construction at the Oxford Exchange will open in A new $2.5 million business center in Alexandria is home to both service and retail businesses. Hotels opening during the year included a Hilton Garden Inn in Oxford and a Hampton Inn in Jacksonville. Looking to expand retail and commercial development, the Anniston City Council voted to establish a Commercial Development Authority similar to Oxford s CDA. With the help of federal stimulus funding, construction on the final section of the Eastern Parkway that will connect McClellan to I-20 kicked off in October. The Anniston- Oxford area could also benefit from a proposal to use stimulus funds for a high-speed rail corridor linking Birmingham and Atlanta. A number of local renovation projects on historic buildings progressed during the year. Construction of a new water treatment plant in Oxford got underway and work began on Oxford s $13 million sports complex. Tourism and events related to cycling and the Chief Ladiga Trail provided a boost to the area s economy, with the trail receiving recognition in National Geographic Adventure as a best weekend trip. Both Anniston and Jacksonville are exploring extending the trail, which currently ends in Piedmont, into their downtown areas. Anniston-Oxford s banking sector grew slightly for the year ending in June 2009, with an increase in deposits of 2.3 percent well below the state- Nonagricultural Employment Total Services Employment Change from October October Number Percent Alabama 1,902,900-95, Anniston-Oxford 51,100-1, Auburn-Opelika 53,100-2, Birmingham-Hoover 507,800-20, Decatur 55,300-3, Dothan 60,100-1, Florence-Muscle Shoals 54,800-2, Gadsden 37, Huntsville 210,000-4, Mobile 180,400-4, Montgomery 173,900-6, Tuscaloosa 95,900-3, Net Jobs in Metropolitan Areas -50,700 Net Jobs in Nonmetro Counties -44,900 Note: Nonagricultural employment (jobs) is by place of work. Source: Alabama Department of Industrial Relations. Manufacturing October Change from Percent of 2009 October 2008 Area Jobs Alabama 248,600-33, Anniston-Oxford 6, Auburn-Opelika 5, Birmingham-Hoover 38,500-3, Decatur 12,100-1, Dothan 6, Florence-Muscle Shoals 7, Gadsden 4, Huntsville 28,300-3, Mobile 15, Montgomery 17,400-1, Tuscaloosa 14,000-1, Source: Alabama Department of Industrial Relations. Change from October 2008 October Professional Educational Leisure and 2009 Total and Business and Health Hospitality Alabama 674,000-18,100-16,100 6,300-5,400 Anniston-Oxford 17, Auburn-Opelika 15, Birmingham-Hoover 193,300-6,200-4, Decatur 18, Dothan 20, Florence-Muscle Shoals 18, Gadsden 15, Huntsville 89, , Mobile 71, Montgomery 62,900-1,500-1, Tuscaloosa 28, Source: Alabama Department of Industrial Relations. Alabama Metropolitan Areas 19

3 average 9.0 percent. The number of insured banks was unchanged at 11 and branches rose by one to 36. Both 2008 per capita income and FY2009 median family income increased faster than the Alabama average, but still ranked in the lower half of the metro areas. Average wages across all industries amounted to $33,760 in 2008, about 93 percent of the state s $36,170. The area added an estimated 563 residents in Although the single-family housing sector continued to contract during the first 10 months of 2009, the number of permits issued for multi-family units increased. Permits for single-family homes fell 23.3 percent through October 2009 when compared to the same period in 2008, while the number of homes sold dropped by 18.2 percent. The metro s FHFA House Price Index was up 0.5 percent year-over-year in third quarter Auburn-Opelika Plant closings dealt Auburn-Opelika s manufacturing sector a serious blow, with a total of around 1,200 jobs lost at BFGoodrich in Opelika and Pace Industries in Auburn during the second half of 2009, adding to the year-overyear monthly decline in nonagricultural jobs that has persisted since April 2008 (except for October 2008). Payroll jobs totaled 53,900 in October 2009, down 2,600 (-4.7 percent) from a year ago. Manufacturing saw the largest cut, losing 800 jobs during the year; professional and business services and state and local government each shed 400. Educational and health services added 100 positions, while jobs in the federal government and financial sectors were unchanged. The metro s labor force contracted by an above-average 4.9 percent between October 2008 and October 2009 while total employment of area residents dropped 9.0 percent, slightly more than the state s 8.6 percent decline. Unemployment climbed to 8.8 percent in October, the second lowest rate across the 11 metro areas. About 2,700 residents commuted to jobs outside the area. GDP has grown faster in the Auburn-Opelika metro than in the state since 2001, with an increase of 61.9 percent compared to Alabama s 43.3 percent. A 4.6 percent gain in the value of goods and services produced in the area in 2008 ranked third among the metros. The important role of Auburn University is evidenced by a 28.3 percent share of GDP generated by the government sector, the highest in the state. While wholesale trade was the most rapidly growing output sector between 2001 and 2008, government was second with an increase of over 65 percent. Manufacturing accounted for 11.1 percent of payroll jobs in the Auburn-Opelika area in October 2009, less than the state average of 13.1 percent. At 21.6 percent, the share of output generated by goods producing industries was 3.3 percentage points below the state s. Auto suppliers, which have become an integral part of the manufacturing sector, have seen both new additions and expansions over the last two years, spurred in part by a strategic location between Hyundai in Montgomery and the new Kia plant in West Point, Georgia. Kia s first production 2011 Sorento rolled off the line in mid-november. Expansions announced in 2009 include a $16.5 million investment at Seohan-NTN Driveshaft USA that will generate 75 jobs, a $20 million project at Cumberland Plastic Systems creating about 50 jobs, the addition of 20 workers at Straehle + Hess USA, and an $11 million investment at Hanwha that could yield 25 jobs. However, tough times for the automotive industry also led to layoffs at some area firms, including Borbet Alabama and Mando. The area s manufacturing sector was dealt a huge blow with the closing of Opelika s BFGoodrich tire plant. The 400 employees who worked their final day at the plant on October 30 were the last of more than 1,000 workers employed when the closing was announced in April. About two-thirds were residents of the Auburn-Opelika metro. BFGoodrich parent Michelin set up a development program to issue loans to small businesses in the area to spur job growth brought a number of new auto suppliers to the metro area, including HANA Factory Automation, promising 40 jobs; Kull Die Casting Technology NA; Selzer Automotive, with a $22 million investment and 80 positions; SMI Auto USA, spending $3 million and hiring 33; and Stratford Plastic Components, putting $34 million into a plant that will employ 65. Six supplier firms announced expansions in 2008, the largest being an investment of $25 million at Mando America that could create 200 jobs; Hanwha s $15 million project with 46 jobs; and a $5.4 million investment at Pyongsan America generating 90 positions. Hoerbiger Automotive Comfort Systems, Aluminum Technology Schmid NA, and Cumberland Plastics Systems also expanded during the year. Other manufacturing expansions announced in 2009 include Matrix Wire, which hired more than 20; Donaldson Company, investing $3.5 million and hiring 25 in 2010; and Briggs & Stratton, consolidating product lines in Auburn and adding jobs in FY2010. The Auburn-Opelika area received national recognition for its business climate and economy during 2009: Forbes ranked Auburn the #1 small metro in projected job growth and the #10 Best Small Place for Business and Careers; BusinessWeek cited Auburn as the best city for starting up a business in Alabama and one of the top 10 strongest building markets in the United States; and CNNMoney.com listed Auburn-Opelika #16 Best Small Place to Launch a Business. Auburn University provides stability for the Auburn-Opelika economy. Enrollment was up slightly to 24,602 in Fall Construction was underway on more than 200 projects on campus during the year, including a new basketball arena and Phase II of the Shelby Center for Engineering Technology; a new student center and residential community 20 Alabama Metropolitan Areas

4 opened in the fall. A research award furthered the relationship between Northrop Grumman and the College of Engineering in the information technology area. Grant funding from the National Institute of Standards and Technology will go toward building a science and commerce center at Auburn Research Park. Labor Force Civilian Labor Force Change from October October Number Percent In retail development, construction progressed on Auburn s first Publix-anchored shopping center that should open in May A 12-screen Carmike Cinemas at Capps Landing in Opelika is slated for fall Auburn annexed the West Pace development; West Pace received approval for a Planned Development District and expects to add restaurants to the current auto mall in However, plans for the Celebrate Alabama shopping and entertainment district were put on hold. Lee County is one of three Alabama counties included in planning for the massive influx of jobs and people by 2011 as nearby Ft. Benning in Georgia expands with BRAC. Expectations for population growth in the Smiths Station area have a new high school under construction and planning for a new elementary underway. Population in the Auburn-Opelika metro rose 1.9 percent (1,700 residents) for the second highest gain of the 11 metro areas. The area s quality of life earned it a place on the U.S. News & World Report 2009 list of 10 best places to live and a listing as a top place to retire by Where to Retire. Opelika s new Sportsplex and Aquatic Center opened in the fall. Auburn-Opelika s banking sector grew modestly during the year ending June 30, with a 5.3 percent increase in deposits in FDIC-insured institutions (compared to 9.0 percent for the state). The number of banks was unchanged at 16 and the number of branches fell by one to 40. Per capita income increased at a state-average 2.7 percent in 2008, but ranked last among the metro areas at $27,601 due to the impact of a large student population. While median family income fell 2.9 percent in FY2009, the area s $59,900 ranked as third highest. Average wages across all industries amounted to $33,130 or 91.6 percent of the Alabama average. Building permits for single-family homes fell almost 19 percent to 540 for the first 10 months of 2009 compared to the same period in 2008, while home sales dropped 16.0 percent. However, multi-family units permitted jumped from just 58 through October 2008 to 556 through October Prices based on the FHFA House Price Index declined 1.5 percent year-over-year in the third quarter. Birmingham-Hoover Alabama s economic center fell on hard times earlier than most of the state; monthly nonagricultural employment in the Birmingham-Hoover metro has consistently been below year-ago levels since January Increasing diversification did not prevent the area from losing a total of 20,100 jobs between October 2008 and October 2009, Alabama 2,090,364-73, Anniston-Oxford 52,789-1, Auburn-Opelika 62,080-3, Birmingham-Hoover 510,621-18, Decatur 70,121-2, Dothan 62,703-2, Florence-Muscle Shoals 66,028-1, Gadsden 44,338-1, Huntsville 197,614-6, Mobile 182,929-3, Montgomery 165,367-6, Tuscaloosa 95,774-3, Source: Alabama Department of Industrial Relations. Total Employment Change from October October Number Percent Alabama 1,867, , Anniston-Oxford 46,856-4, Auburn-Opelika 56,625-5, Birmingham-Hoover 460,221-43, Decatur 62,411-6, Dothan 56,889-4, Florence-Muscle Shoals 58,857-5, Gadsden 39,665-3, Huntsville 182,008-14, Mobile 162,727-13, Montgomery 148,796-13, Tuscaloosa 86,821-7, Note: Total employment is by place of residence. Source: Alabama Department of Industrial Relations. Alabama Metropolitan Areas 21

5 a 3.8 percent decline that was the third highest metro area loss and reduced the total to 507,800. Service providing businesses shed 13,200 workers (-2.9 percent) and goods producing industries cut 6,900 (-8.9 percent). The sizeable professional and business services sector, usually a source of stability, was seriously impacted by the current recession, losing 4,400 jobs during the year, including 2,500 in professional, scientific, and technical services and 1,900 on the administrative and support side. Pullbacks in consumer spending cost the metro 3,100 jobs in retail and 1,700 at food services and drinking places. Construction employment slid by 3,200 during the 12 months ending in October and manufacturing jobs dropped by 3,600, including 2,800 in durable goods industries. Ambulatory healthcare was the only growth sector, adding 500 jobs. The seven-county Birmingham-Hoover area is a net importer of workers, providing almost 47,600 more jobs than employed residents in October Total employment fell 8.6 percent during the prior 12 months while the labor force contracted by just 3.6 percent; unemployment reached 9.9 percent compared to 4.9 percent a year earlier. The metro dominates the state s economy, accounting for 31.9 percent of Alabama GDP in This is down slightly from a 32.5 percent share in 2007, largely due to strong growth in the Huntsville metro economy. Area GDP gains of 2.3 percent in 2008 and 35.5 percent between 2001 and 2008 have failed to keep pace with growth in Alabama GDP. Service providing businesses dominate the Birmingham-Hoover economy, contributing a metro area-high 71.0 percent of output during Goods producing industries accounted for 18.2 percent of the total value of goods and services produced the second lowest share among the metros. Manufacturing accounted for just 7.6 percent of Birmingham-Hoover nonagricultural jobs in October 2009 and 9.7 percent of 2008 GDP. Tough times for auto manufacturers negatively impacted the economic well-being of the many metro residents who commute out of the area to jobs with Honda and Mercedes-Benz. Auto supplier jobs could grow by about 400 over the next four years as Kamtek completes a $310 million expansion and adds work for Volkswagen. The steel industry was hurt by slumping demand that resulted in extended layoffs for about threequarters of the 1,700 workers at U.S. Steel s Fairfield Works pipe plant during the year; fees levied by the U.S. Commerce Department on unfairly subsidized Chinese imports will benefit the plant and the company moved ahead with a $12 million project to upgrade the factory s blast furnace. Posco s new $17 million steel processing plant in Birmingham could create 60 jobs late in Boatright is investing in two railroad tie producing facilities, including a $40 million plant in Clanton that will employ 60 and a $25 million Carbon Hill operation that will create 40 jobs in Walker County. Red Diamond officially opened its Moody headquarters and plant in April; St. Clair County will also see an expansion at Pell City s Benjamin Moore factory that should add 40 jobs. Birmingham will soon be home to Green Solar Manufacturing, which is investing $11 million and hiring about 150 as it establishes its headquarters there. And Walter Energy moved its corporate headquarters from Tampa to the Galleria Office Tower in Hoover in December. Other area manufacturers fell on hard times during the past year. Bankrupt Meadowcraft was forced to liquidate its assets. A bid by House Hasson Hardware for Pelhambased Moore-Handley would retain only employees in inventory sales. Konecranes shuttered its Birmingham operation late in 2009; Altec Industries closing cost the area 70 jobs. Birmingham s printing and publishing businesses had a tough time as Time Inc. continued to cut operations at Southern Progress and in August closed Southern Accents; more than 170 workers were let go during the year. AT&T announced plans to close its Stephens Graphics phonebook printing plant, idling 208. And Dewberry Engraving halted production at its Birmingham plant. There were positive developments in warehousing and distribution, although a bulk distribution vacancy rate of about 20 percent was reported at the end of the third quarter. Home Depot opened its $33 million distribution facility in McCalla, with 179 employees. Daniel Payne Industrial Park in north Birmingham continued to expand new facilities for M&A Supply, Old Dominion Freight Lines, Conklin Metals, and Flowers Baking Company represent investment of $13.7 million and around 120 jobs. EGS Commercial Real Estate completed an $8 million spec warehouse and distribution center in Shelby West Commerce Center in the spring, while Sparta Logistics purchased a site in Shelby County for a $7 million distribution facility for a healthcare company that could create 65 jobs early in Several developments built on Birmingham s long history as a railroad hub. CSX Transportation began operating its $6 million container loading terminal in Bessemer in September, serving clients that include the nearby Mercedes plant. Norfolk Southern worked for much of the year on plans for a $112 million intermodal hub in McCalla, lining up potential customers and investing $12 million in land acquisition for the operation that could employ 600. However, community opposition had the project in limbo at the end of the year. A planned $193 million expansion of the Birmingham International Airport will lengthen the runway and add a customs office and new gates. The airport also recently purchased 25 acres and industrial building space next to its air cargo operation. New jobs at the adjacent Alabama Aircraft Industries are expected to boost the firm s employment to 1,000 in Other service providing sectors saw activity in AT&T established a regional headquarters in Birmingham and hired 300 workers for a call center at the same site. Several companies in the insurance industry added employees to meet growing demand for annuity and other products from 22 Alabama Metropolitan Areas

6 increasingly risk-averse customers. However, the banking sector, faced with a rising number of bad loans, lost 500 jobs during the year ending in October TARP funding helped firms including Regions Financial Corporation, the city of Birmingham s largest private employer with about 6,000 workers. BBVA Compass cut several hundred staff in Birmingham early in 2009 and shifted about 200 call center jobs to Texas late in the year. Birmingham s CapitalSouth Bank failed in late summer; deposits and assets were acquired by IberiaBank of Lafayette. Metro area bank deposits grew at a strong 13.8 percent pace during the year ended June 30, 2009 and amounted to a third of all deposits in FDIC-insured institutions in the state. The number of banking institutions rose by one to 51 and the number of branches fell by nine to 353 during the previous 12 months. Federal stimulus dollars in the form of increased grant funding channeled through the National Institutes of Health and the National Science Foundation helped the University of Alabama at Birmingham (UAB) maintain and even increase sponsored research programs and staff during the year. Ongoing research and products resulting from the area s biotech industry led to a number of development agreements or funding sources during the past year for UAB and Southern Research Institute as well as for companies including SurModics, Viaxin, and Discovery BioMed. Despite reductions in hospital staff, as a whole the metro s large health services industry was relatively stable. A number of projects under construction will add capacity and services during the next several years. The Jefferson County Department continued to bring new facilities online, completing the Eastern Health Center. Trinity Medical Center sought approval for a $280 million relocation and expansion from its current Montclair Road facility into the unfinished former HealthSouth Digital Hospital in the Cahaba Center at Grandview on U.S State health regulators approved $72 million in renovation and expansion planned for Princeton Baptist Medical Center. Baptist Health Systems also broke ground on a medical office building in Hoover. With a groundbreaking in May, Children s Hospital got a $570 million expansion underway; move-in is expected in mid The new facility will link to UAB s $140 million Womens and Infants Center that was completed during the year. Construction got underway on an expansion of Brookwood Hospital s psychiatric department late in The 30-doctor Norwood Clinic is opening in a converted grocery store building in Fultondale, following closing of medical buildings in Norwood Plaza adjoining the shuttered Physicians Medical Center Carraway. Federal dollars will pay for a $62.4 million Pell City nursing facility for the Department of Veterans Affairs. A State Health Board ruling (any city of over 60,000 residents is allowed to have a hospital even if the county has an excess number of beds) clears the way for a future facility in Hoover. Retail employment declined during 2009 due to bankruptcies, store closings, and general reductions in staff. Gross Domestic Product Total GDP (Millions of Current Dollars) Percent Change Percent 2001 to 2007 to of State Alabama 170, Anniston-Oxford 3, Auburn-Opelika 3, Birmingham-Hoover 54, Decatur 5, Dothan 4, Florence-Muscle Shoals 3, Gadsden 2, Huntsville 19, Mobile 15, Montgomery 14, Tuscaloosa 8, Source: U.S. Bureau of Economic Analysis. GDP Share by Broad Industry Classification 2008 (Percent of Total) Goods Service Producing Providing Government Alabama Anniston-Oxford Auburn-Opelika Birmingham-Hoover Decatur Dothan Florence-Muscle Shoals Gadsden Huntsville Mobile Montgomery Tuscaloosa Source: U.S. Bureau of Economic Analysis. Space newly-vacated by companies including Bruno s, Goody s, Marshall s, Linens N Things, and Circuit City contributed to retail occupancy averaging 88.5 percent across the Birmingham area; the Western market saw the lowest occupancy at 82.7 percent. Sears closed its Fairfield store late in the year, after pulling out as the last anchor at Century Plaza mall in the summer; Century Plaza owner General Growth Properties shuttered the mall on June 14. Long-time area retailers, including Hunter Furniture, Forbes Piano, and Bromberg s, closed stores during the year; several auto dealers also fell victim to economic conditions and closing mandates. Bruno s, which had seen its Birmingham-Hoover market share fall by almost half in the past three years, succumbed to its second Chapter 11 bankruptcy filing; 56 stores across the state were purchased by Southern Family Markets in the spring. The company is continuing to operate 31 stores but liquidated 25, including 12 in the Birmingham-Hoover metro area that had employed about 800. Although the Riverchase Galleria held up fairly well, a planned Nordstrom store was cancelled. Alabama Metropolitan Areas 23

7 The year also brought new retail development as well as groundwork for future plans. Stores opening at The Grove in Hoover included SuperTarget, Kohl s, Books-A-Million, and Petco. Bessemer annexed the Colonial Promenade Tannehill, which added stores and laid plans for second and third phases. The Shoppes at the Colonnade also saw new tenants and the Whole Foods-anchored Cahaba Village shopping center completed an addition. Bayer Properties completed an expansion of The Summit that is equally divided between office and retail space. Pell City s Bankhead Crossing added movie theaters and a new hotel. Auto shopping options grew with the first Mini-Cooper dealer in Birmingham and a dealership for the Indian Mahindra that is slated to open soon. Aldi is building its sixth Birmingham area grocery store in Pelham. Daniel Corp. had 35 commitments in August for the outlet mall it is preparing to build near Bass Pro Shops in Leeds; the new mall will further challenge Bessemer s struggling Watermark Place. Two developers that were responsible for significant Birmingham- Hoover retail development, Colonial Properties Trust and AIG Baker, are exiting the business. Tight financing and the effects of the recession on businesses and consumers challenged the area s hotel and hospitality sector in Harbert was unable to obtain timely financing to transform the former Regions Bank headquarters in downtown Birmingham into a Marriott Renaissance hotel, with Regions looking for other prospects for the building. A Holiday Inn Express planned for the entrepreneurial district was also on hold. However, Aloft and Holiday Inn hotels as well as a nonmedical office building will be coming to the Cahaba Center at Grandview on U.S. 280; an Aloft opened in Homewood s SoHo Square in the spring. A number of properties were being marketed in Birmingham s downtown entertainment and theater districts early in 2009; the recession has resulted in the closing of some restaurants and art venues in that area. While a $22 million renovation of the Sheraton Birmingham adjacent to the Birmingham-Jefferson Convention Center (BJCC) was completed in the fall, hotels slated for The Forge, a proposed entertainment district, were cancelled when the developer was unable to line up financing. The availability of only around 1,000 hotel rooms within walking distance cost the BJCC the Gideon s convention this year and negatively impacts its ability to draw large groups. Entertainment and dining options serving residents of Birmingham s 2nd Avenue loft district grew, including the Rogue Tavern venue. Although its future is still in doubt, the BJCC broke ground on the much-debated domed stadium in July. The project is expected to cost around $530 million for a stadium that will seat 57,500 and includes 160,000 sq.ft. of exhibition space. The Center paid $1.1 million for a block nearby that would be used for parking for the facility and proposed entertainment district. Sporting events drew fans to the Birmingham- Hoover area during 2009, with a Davis Cup tennis competition, the annual Magic City Classic football game, the Regions Charity Classic golf tournament, and running, basketball, soccer, softball, and other sports boosting hospitality dollars by an estimated $180 million during the year. Barber Motorsports Park added Indy Car racing to its schedule and the Kevin Schwartz Suzuki School to its offerings. The 45th anniversary tribute to the Ford Mustang drew a large crowd of participants and visitors to Barber in April was a time of financial and political turmoil in Jefferson County. Early in the year, the county was hit with a ruling that struck down the occupational and business license taxes that provided about $78 million annually. The loss of around a quarter of the county s operating revenue forced layoffs and curtailment of services and employee hours as the county tried to work out an acceptable tax plan. The year also passed without resolution of Jefferson County s $3.2 billion sewer debt issue. Birmingham Mayor Larry Langford was removed from office in the fall after conviction on 60 federal felony counts of bribery, with the election of a new mayor awaiting a 2010 runoff. On the positive side, the year saw the emergence of a unified organization to promote economic development across the metro as the Birmingham Regional Chamber of Commerce, the Metropolitan Development Board, and Region 2020 were folded into the new Birmingham Business Alliance. Progress was made on a number of projects that contribute to the quality of life of Birmingham-Hoover metro area residents. Trussville was able to purchase 1,472 acres along the Cahaba River, previously planned for a massive development, for parks, greenway, and water supply use. Birmingham is moving ahead with plans for a $5 million amphitheater at Railroad Reservation Park and for a $22 million overhaul of Fair Park. The Birmingham Housing Authority neared completion of a $23 million project in the Tuxedo Terrace housing community and received federal money for renovations at Cooper Green Homes. A new plan for an elevated portion of U.S. 280 was presented late in the year. The seven-county metro area gained an estimated 8,936 new residents in 2008 for a state-average increase that brought the population total to 1,117,608. Per capita income of $40,379 was the highest of the 11 metros in 2008, although the increase of 2.5 percent was slightly below the state average. Median family income grew a stronger 3.0 percent in FY2009 and ranked second at $60,900. Average annual wages of $38,980 in 2008 were percent of the Alabama average. Both the commercial and residential real estate markets struggled in Most loft/condo conversions as well as potential office space renovations were put on hold or canceled during the year. However, construction is underway on Cityville Block 121, a $35 million mixed-use project on 20th Street in Birmingham that includes apartments, shops, and restaurants. Lane Park is among other mixed- 24 Alabama Metropolitan Areas

8 use projects in the planning stages the $200 million development would replace the Mountain Brook Shopping Center and nearby apartments with retail, office, residential, and hotel space. Permits for single-family construction in the Birmingham-Hoover metro totaled 1,479 during the first 10 months of 2009, two-thirds the number for the same period a year ago. Plans for multi-family construction were severely curtailed during the same period, falling from 1,017 units in 2008 to just 98 for A total of 9,114 homes were sold in the first 10 months of the year, down an aboveaverage 19.4 percent. The decline in area home prices as measured by the FHFA House Price Index amounted to 2.4 percent in the third quarter of 2009, the second highest metro area drop. For the year-over-year comparison, prices decreased 1.6 percent. Decatur Although Decatur s above-average manufacturing exposure renders its economy more vulnerable in a recession, the metro entered the jobs recession several months later than the state, with monthly nonagricultural employment staying below year-ago levels since August A 23.1 percent share in manufacturing contributed to a 5.5 percent drop in nonagricultural jobs between October 2008 and October 2009 that was the highest among Alabama s metro areas. Payroll employment declined by 3,200 to 55,300; goods producing industries shed 2,000 jobs (-11.1 percent) while service providing businesses lost 1,200 (-3.0 percent). Manufacturing s loss of 1,400 workers was evenly divided between durable and nondurable goods producers. On the service-providing side, retail trade saw the steepest decrease of 400 jobs and government dropped 300 workers. Only education and health services added jobs during the year ending in October with an increase of 100. Transportation, warehousing, and utilities; information; and other services were flat. With about 7,000 more employed residents than nonagricultural jobs, the Decatur metro continues to be a net exporter of workers, many of whom make the drive to nearby Huntsville. The area s labor force contracted by a slightly below-average 3.3 percent in the 12-month period ending in October, while total employment fell by 9.3 percent, the largest decrease of the 11 metros. Unemployment rose from 5.1 percent in October 2008 to 11.0 percent a year later. GDP growth slowed to 3.0 percent in 2008 compared to Alabama s 3.3 percent gain, although for the entire 2001 to 2008 period the value of goods and services produced in the Decatur area climbed a slightly-above average 46.1 percent. Many manufacturers in Decatur produce a high value-added product; goods producing industries accounted for 53.8 percent of output in 2008, with manufacturing alone generating 46.5 percent of area GDP. Manufacturing output climbed 68.9 percent between 2001 and Population 2007 to 2008 Number Percent Net 7/1/2008 Change Change Migration Alabama 4,661,900 35, ,578 Anniston-Oxford 113, Auburn-Opelika 133,010 2, ,703 Birmingham-Hoover 1,117,608 8, ,279 Decatur 150,125 1, Dothan 140,961 1, ,176 Florence-Muscle Shoals 143, Gadsden 103, Huntsville 395,645 9, ,169 Mobile 406,309 2, Montgomery 365, ,304 Tuscaloosa 206,765 2, ,258 Source: U.S. Census Bureau, Population Estimates Division. Decatur s manufacturing industries were optimistic through much of 2008; total investment of $696 million among 14 firms earned the metro recognition by Site Selection as the #3 small metro for industry growth. After several plant closings early in 2009, the area s manufacturing sector was relatively stable. Chemical manufacturer BASF closed its Decatur plant at the end of March, idling 115. And the April closing of the Cargill factory cost the metro 107 positions. United Launch Alliance (ULA) had several layoffs as projects wound down during the year. The company saw 16 successful launches in A $159.3 million expansion announced in 2008 will add jobs as ULA phases out the smaller Delta II rocket and adds construction of the Atlas V. A $927.7 million contract award from the Air Force in the fall will help the company combine construction of the Atlas V with its current Delta IV rockets. Other firms, including Emerson Climate in Hartselle, BP Amoco, and Nichols Aluminum reduced employment during the year. Debt service issues forced Solutia to sell its nylon business to SK Capital Partners in the spring, resulting in the renamed Ascend Performance Materials in Decatur. Expansion at resin producer AlphaPet was expected to create 100 jobs in the fall. In November strengthening demand allowed 3M to resume an expansion of its Decatur optical film plant that had been on hold. Early in the year Monarch Steel was continuing to add equipment to service Nucor s light gauge steel coils even though Nucor was delaying start-up of its galvanizing plant. Despite losses through the first half of 2009, Nucor began production at the new plant in the summer as the forecast for steel improved. Hexcel, with 2008 investment of $180 million creating 25 jobs, and Toray Carbon Fibers saw strong demand for their outputs which go into the production of carbon fiber used in the new Boeing jetliner. Bond funding was approved to purchase land on I-65 near Hartselle for a new industrial park. State funding kept construction of Calhoun Community College s Robotics Technology Park moving forward during Alabama Metropolitan Areas 25

9 2009, while partnerships with vendors are supplying robots and training equipment. The first phase of the project, which will provide both government and private sector employers with workers specially trained in robotics, was completed in the spring. A second phase is slated for completion early in 2010 and design of a third phase will follow. An expansion project at the community college will help serve a growing number of students. Decatur s financial sector was challenged in 2009, losing around 200 jobs through October, with BBVA Compass laying off 65 employees by year-end. Both Decatur General and Parkway Medical Center received Tier 1 rankings as providers in the state s hospital services industry. Strategic planning should help Decatur General stem recent operating losses. The area s hotels benefited from sporting events, including soccer, softball, and fishing tournaments, although occupancy suffered due to slumping business travel. Retail additions continued at The Crossings of Decatur where Academy Sports and Outdoors opened in the summer. New tenants have also moved into the renovated Denbo Plaza. However, several auto dealerships closed during 2009 and planned remodeling of Decatur Mall was postponed. Quality of life improvements included work on a Special Needs Accessible Playground in Hartselle, three senior citizen sites in Lawrence County, and Decatur Utilities sewer and water services projects. With the help of a $22.1 million federal government loan, Hartselle is moving ahead on plans for a new $40 million high school. Federal stimulus funding is contributing to downtown revitalization in Decatur and Hartselle. The Decatur Downtown Redevelopment Authority launched a campaign to fund an arts center that would be shared by Calhoun Community College and Athens State University. Population in the Decatur metro area rose a state-average 0.8 percent during 2008, with an estimated 1,130 new residents. Just 48 building permits were reported for singlefamily homes during the first 10 months of 2009, less than half the number for the same period in There were no multi-family units permitted through October and just 12 the year before. Planned residential redevelopment of the former Indian Hills Golf Course was put on hold. Home prices measured by the FHFA House Price Index slipped 0.8 percent in third quarter 2009, but were down just 0.2 percent from a year ago. Deposits in FDIC-insured banks increased a modest 1.7 percent for the year that ended June 30. The number of banking institutions was unchanged at 14, although the number of branches fell by two to 46. Above-average gains of 3.3 percent for 2008 per capita income and 3.8 percent for FY2009 median family income earned the Decatur metro a 5th place ranking on both average annual wages of $34,200 were 94.6 percent of the Alabama average. Dothan With its retail-heavy economy, Dothan was the first Alabama metro to see a sustained decline in jobs; payroll employment has been steadily below year-ago levels since December Opening of the Country Crossing entertainment venue on December 1 gave employment a boost that is not reflected in the October 2008 to October 2009 loss of 1,900 nonagricultural jobs (-3.1 percent) that dropped the total to 60,100. Dothan s relatively small goods producing sector was the hardest hit, with employment in manufacturing down 700 and construction off by 500. Service producing industries lost a total of 700 jobs. Retail trade and the professional and business services sector each shed 300 jobs during the 12-month period. Government was a growth industry, adding 200 positions in the state and local sector, while education and health services and transportation, warehousing, and utilities each gained 100. Employment in the information and federal government sectors was flat. The Dothan area is a net importer of workers, with over 3,000 more jobs than working residents. Total employment fell 7.6 percent during the year ending in October 2009 compared to a statewide decline of 8.6 percent. With a state-average 3.4 percent drop in the labor force, unemployment rose from 5.1 to 9.3 percent over the year, fourth lowest among the metro areas. However, GDP grew more slowly in the Dothan metro than in the state between 2001 and 2008 an increase of 37.9 percent compares to Alabama s 43.3 percent gain. Dothan was the only metro to see a current dollar decline in GDP during 2008; the value of goods and services produced in the area fell 2.2 percent for the year, with the drop spread across most dominant sectors except government. At 68.0 percent, the share of GDP generated by service providing businesses is secondhighest among the 11 metro areas, while the 18.0 percent of GDP from goods producing industries is the lowest. Manufacturing contributed 10.3 percent of payroll jobs in the Dothan metro area in October 2009, with employment down more than 10 percent from a year ago. Development news in 2009 included the announcement of new industry All Metal Roofing & Siding, investing $2.3 million and creating 35 jobs. However, cuts were reported at several local manufacturers early in the year Reliable Products in Geneva laid off 156 in January and Dothan s Tri-State Plant Food let most of its employees go in November. Among expansions announced in 2008, Cummings Signs added another 100 workers, a $2 million investment at Lincoln Fabrics should create about 30 jobs, and Wholesale Wood Products was spending $1.2 million and adding 20 workers. Aviation services, a primary focus of the area s nonmanufacturing industry, has lent stability. Army Fleet Support at Fort Rucker was adding about 200 workers to its around 3,800 employees in the second half of the year. Henry County high school students will have convenient access to 26 Alabama Metropolitan Areas

10 aircraft maintenance training offered at the Ozark Aviation Campus of Enterprise-Ozark Community College from a classroom being set up at the Headland airport in Dothan has been growing its distribution business despite the lack of a controlled access highway to I-10. Several Mexican factories have opened sites in the last two years and another was added in February 2009 to receive goods shipped through Panama City, Florida for distribution. A trade agreement between the Port of Panama City and the Port of Progreso in Yucatan could boost trade, with a possible use of Dothan and Geneva County s food service industry to provide cold storage for imported food products. Opening of the new Panama City-Bay County International Airport in the spring of 2010 should help development in the Dothan area, particularly with respect to industries that would supply and service the airport. State approval of a private proposal under consideration for a toll road to include a southern loop around Montgomery and a route from Midland City south to at least the Alabama line would bring the interstate link closer to reality. National chain store closings dealt a blow to the area s retail sector early in About a quarter of Dothan Pavilion s retail space was vacant in February, despite the opening of a movie theater and several restaurants. Still, the Dothan Village shopping center that will incorporate hotels and retail businesses broke ground in the spring. Work progressed slowly on three Publix locations in the Dothan area. The Publix-anchored Cottonwood Corners and Publix stores at Westway and in a redevelopment project at Northside Mall could all open in Both a Hilton Garden Inn and Country Inn and Suites opened in the fall. The Country Crossings country music-themed entertainment venue and bingo hall provided a boost to construction employment during 2009 and to jobs in the leisure and hospitality industry late in the year. Phase 1 of the project opened December 1 as country music stars greeted visitors to the development s bingo hall and three inside celebrity restaurants. The site also houses a bed and breakfast, amphitheater, and RV parking area. The 1,700 electronic bingo machines were tested for compliance with Alabama Supreme Court guidelines. An estimated 2,000 contractors and employees were on hand for opening day. Site preparation is underway for Phase 2 which will include a Family Entertainment Center, bowling alley, arcade, stage, and other family attractions. Income and Wages Per Capita Income 2008 Per Capita Percent Change Income from 2007 Unites States $40, Alabama 33, Anniston-Oxford 32, Auburn-Opelika 27, Birmingham-Hoover 40, Decatur 33, Dothan 32, Florence-Muscle Shoals 29, Gadsden 29, Huntsville 37, Mobile 30, Montgomery 35, Tuscaloosa 33, Source: U.S. Bureau of Economic Analysis. Average Annual Wage 2008 All Industries Average Wage Percent of State United States $42, Alabama 36, Anniston-Oxford 33, Auburn-Opelika 33, Birmingham-Hoover 38, Decatur 34, Dothan 32, Florence-Muscle Shoals 31, Gadsden 32, Huntsville 44, Mobile 35, Montgomery 35, Tuscaloosa 35, Source: U.S. Bureau of Labor Statistics, Division of Occupational Employment Statistics, May Population trends in the Dothan area have benefitted from the relocation of some coastal Florida residents; population rose 1.2 percent in 2008 with an estimated 1,176 new residents. BusinessWeek named Dothan the #1 place in Alabama to raise a family. The City of Dothan continued to provide funding to support public/private redevelopment of its downtown. Work got underway on a $46 million sewer treatment plant during the year and on a HUD-funded elderly housing development. Alabama Metropolitan Areas 27

11 Growth in deposits in the Dothan metro s banking sector was a strong 11.1 percent for the year ending June 30, above Alabama s 9.0 percent gain. The addition of one banking institution brought the area total to 21, while branches increased by two to 55. At 2.4 percent, per capita personal income growth during 2008 was the lowest among the metros, although the area s $32,016 ranked seventh. However, median family income was up a strong 5.8 percent to $51,100 in FY2009. Average wages across all industries in 2008 amounted to $32,920 or 91.0 percent of the Alabama average. Building permits were issued for 175 single-family homes in the Dothan metro area during the first 10 months of 2009, a 38.2 percent decline from the same period in There were 56 multi-family units permitted compared to none the previous year. Home sales held up fairly well through October, down just 8.0 percent versus a 15.3 percent drop statewide. Home prices based on the FHFA House Price Index actually rose in the third quarter compared to both the prior quarter and a year ago, up 0.5 and 1.7 percent, respectively. Florence-Muscle Shoals Groundwork laid with the help of Retirement Systems of Alabama (RSA) investment has developed industrial capacity in the Florence- Muscle Shoals metro over the last several years and set the stage for increased production as the economy recovers in National Alabama, facing weak demand for railcars in 2009 and difficulty finding capital investment, was able to purchase needed production equipment with a $275 million loan from RSA in spring 2009 and by mid- October had turned out close to 50 cars with about 120 workers. RSA investment in a facilities upgrade that enabled the Wise Metals Group to manufacture wider aluminum sheets landed the company a $1 billion plus contract with Anheuser-Busch InBev to provide aluminum can sheets for at least five years; production is beginning in The jobs recession that took hold in the Florence-Muscle Shoals area in January 2008 persisted during 2009, however, with total nonagricultural employment of 54,800 in October down 2,100 (-3.7 percent) compared to October Monthly job totals have consistently been below yearago levels since January The goods producing sector saw the steepest decline over the past year, as natural resources, mining, and construction shed 600 and manufacturing lost 500 jobs. On the services side, professional and business services employment declined by 400, while trade saw payrolls shrink by 300 during the year ending in October, including a drop of 200 in the area s sizeable retail trade sector. Education and health services and state and local government each gained 100 jobs, while information, leisure and hospitality, and federal government employment were flat. 28 Alabama Metropolitan Areas Total employment of Shoals residents fell by around 5,400 between October 2008 and October 2009, an 8.4 percent decline that was below the state s 8.6 percent drop. Just about 2,000 workers left the labor force during the year, a 2.9 percent decrease that was third lowest among the 11 metros. Job losses coupled with workers staying put pushed unemployment to 10.9 percent in October, up from 5.5 percent a year earlier. With around 4,000 more employed residents than jobs, the area continues to be a net exporter of workers. The Florence-Muscle Shoals economy expanded at a slightly faster pace than the state s between 2001 and 2008 current dollar output of goods and services rose 45.7 percent, including a 3.6 percent gain in The Tennessee Valley Authority (TVA) and the University of North Alabama contribute to an above-average 20.7 percent of GDP generated by the government sector. Manufacturing contributed a state-average 13.1 percent share of area jobs in October Although employment contracted, there were no major closings and considerable capacity development that will generate jobs as the economy rebounds. The slow start-up of railcar production at National Alabama gave the area the opportunity to continue training the workforce as the company looks toward a strong long-term outlook. Wise Metals is beginning work under its Anheuser-Busch InBev contract for aluminum can sheets in SCA Tissue completed a $14 million expansion announced in 2008, adding capacity with a new paper machine. After a $4.5 million expansion in 2008 that added 30 jobs, commercial flooring manufacturer Flexco announced a 2009 investment of $6.2 million in a new product line that will create 50 jobs over three years. Tuflex Rubber Products completed its new Tuscumbia plant, expected to employ around 65. Initiatives to grow existing industry are getting a boost from the October launch of a TVA program to reward companies making a long-term commitment in terms of jobs and investment with power bill credits. Infrastructure development at Shoals Research Airpark is continuing; a spec building near Rogersville Industrial Park should be ready in Spring Technical training, particularly in welding and machine work is an ongoing emphasis. Northwest Shoals Community College began offering welding classes at Lauderdale County s Central High in the fall and broke ground on a new training building at its Phil Campbell campus. Muscle Shoals High School s auto tech class received a top 20 ranking in Tomorrow s Technician. The area could become a center for technical education at the high school level under a proposal to create the Tennessee Valley Career Technology Center as a residential campus on TVA property. Results of a recent study suggest redeveloping TVA s Muscle Shoals Reservation as a research and development campus offering highly-skilled employment with a focus on energy industry innovation. The challenging economic environment has added to empty storefronts across the Shoal s retail landscape, while newer

12 shopping centers have not filled up. Still, the area s shopping hub, Regency Square Mall, is relatively stable and 2009 saw new restaurant and hotel development, including the opening of a Best Western Hotel and Suites in Russellville and Holiday Inn Express in Florence. A Comfort Inn and Suites and Residence Inn by Marriott should add to the hospitality scene in TVA s consumer connection study is helping Tuscumbia evaluate its retail potential, while another project is looking at future commercial and retail development of Colbert County s U.S. 72 corridor. The future of hospital-based healthcare was under debate in the Florence-Muscle Shoals metro in 2009 as financial problems and debt load at the two providers who operate the area s three major not-for-profit hospitals raised concerns about their ability to maintain and upgrade services. Late in the year, Huntsville Hospital was considering a proposal to team up with Helen Keller Hospital and the Coffee Health Group that could help them refinance their respective $40 and $140 million in old debt and shore up operations. RSA s investment in the area s leisure and hospitality industry continued to pay dividends, with the new Robert Trent Jones Spa Trail promoting the spa at the Marriott Shoals Hotel. Population growth in the metro was a modest 0.5 percent for the year ending July 1, 2008, with an estimated 784 new residents. Completion of BRAC-related moves over the next two years could add to the area s population as well as provide jobs for residents almost 900 employees at Huntsville s Redstone Arsenal commuted from the Shoals in Enrollment at the University of North Alabama in Florence has grown from around 5,000 to 7,000 students in recent years, bringing more college students to the area. Recent quality of life improvements included completion of Sheffield s Love Plaza, a trailhead for the city s bike and pedestrian path. Creation of the Muscle Shoals National Heritage Area in 2009 will provide marketing funding. Helped by the city s $14 million investment in a new sportsplex, revitalization of the area west of downtown is a priority for Florence, although the city s decision to purchase the Florence Golf and Country Club and its potential future landfill use was controversial. Deposits in FDIC-insured institutions rose a modest 4.0 percent during the year ending June 30. Still the number of banks operating in the area rose by two to 13 during the year, with the addition of three branches bringing the total to 54. Per capita personal income growth of 3.8 percent during 2008 was better than the state s 2.7 percent gain. Florence-Muscle Shoals was one of just two areas to post a decline in median family income in FY2009, with a decrease of 1.7 percent to $51,400 (7th among the metros). The 2008 average wage across all industries of $31,510 was the lowest among the 11 metros at 87.1 percent of the state average was a tough year for the area s residential real estate sector. Building permit activity plummeted Housing Industry Residential Building Permits Single-Family Multi-Family Change Change 2009* from 2008* 2009* from 2008* Alabama 6,998-2,482 2, Anniston-Oxford Auburn-Opelika Birmingham-Hoover 1, Decatur Dothan Florence-Muscle Shoals Gadsden Huntsville 1, Mobile Montgomery Tuscaloosa * Data for both 2008 and 2009 cover the period January through October. Note: Data are for permit-issuing places only. Source: U.S. Census Bureau, Building Permits Survey. Total Homes Sold Percent Change 2009 from 2008 Alabama 32, Anniston-Oxford Auburn-Opelika Birmingham-Hoover 9, Decatur n.a. n.a. Dothan Florence-Muscle Shoals 1, Gadsden Huntsville 6, Mobile 2, Montgomery 2, Tuscaloosa 1, Note: Data for both 2008 and 2009 cover the period January through October. Source: Alabama Center for Real Estate, The University of Alabama. Percent Change in FHFA House Price Index Q Q to Q to Q United States Alabama Anniston-Oxford Auburn-Opelika Birmingham-Hoover Decatur Dothan Florence-Muscle Shoals Gadsden Huntsville Mobile Montgomery Tuscaloosa Source: Federal Housing Finance Agency. Alabama Metropolitan Areas 29

13 through October compared to the same period in Single-family home permits totaled 113, half the prior year s to-date total; multi-family units permitted dropped from 133 to 24. While the number of homes sold during the first 10 months was down a much smaller 18.9 percent, home prices as measured by the FHFA House Price Index saw the largest decrease among the state s metros with a decline of 4.5 percent in the third quarter. The index slipped 1.9 percent from its third quarter 2008 reading. Gadsden Gadsden was the last of Alabama s 11 metros to fall into the recession in terms of jobs, with employment not slipping below year-ago levels until December The area s slide has also been less steep 500 jobs were lost between October 2008 and October 2009 for a 1.3 percent decline that contrasts with a statewide drop of 4.8 percent. Goods producing industries were responsible for all of these job losses; manufacturing jobs fell by 400 and employment in natural resources, mining, and construction was off by 100. The service providing sector as a whole was flat during the 12-month period, with modest losses of 200 professional and business services jobs and 100 leisure and hospitality positions balanced by the addition of 100 workers in each of transportation, warehousing, and utilities; education and health services; and state and local government. With a total of 39,665 Gadsden area residents employed in October 2009 versus 37,500 nonagricultural jobs located there, the metro is a net exporter of workers. Cutbacks at nearby Honda and auto supplier plants had an adverse impact on total employment, which fell by 3,046 (-7.1 percent) during the preceding 12 months. The labor force contracted by a much smaller 1,041 people employed or looking for work, jumping unemployment from 5.9 percent in October 2008 to 10.5 percent a year later. Across the entire 2001 to 2008 period, the Gadsden metro s GDP grew at a slower than average pace; an increase of 35.7 percent compares to Alabama s 43.3 percent gain. However, the value of goods and services produced in the area expanded 3.6 percent in 2008 versus 3.3 percent for the state. Gadsden s economy has an above-average emphasis on service providing businesses 64.9 percent of 2008 GDP was generated by this sector for the third highest share among the 11 metro areas. Manufacturing contributed 12.8 percent of area jobs in October 2009 and 22.3 percent of 2008 GDP, both slightly below the state average. While 2009 saw a modest contraction and no major announcements, work completed and groundwork laid during the year should have Gadsden s manufacturing sector back on track in Keystone Foods moved into a new location for its poultry processing operations in the fall, with the investment of $118 million adding 150 jobs. Southern Cold Storage also completed a $9 million distribution facility to service Keystone employing 40. Federal, state, and local funds are supporting infrastructure development that will four-lane Airport Road and extend utilities to a sizeable tract near Keystone, opening the land for development when completed late in Goodyear finished a three-year expansion and modernization of its Gadsden plant, adding about 230 workers since the project got underway. Gadsden officials are working on attracting additional Goodyear investment in the plant. However, weak demand for its pre-engineered metal buildings forced Rigid Building Systems to close down its Gadsden plant in June, laying off the remaining 69 employees. In anticipation of a spurt of activity after the current lull, area developers continued to assess sites and had EDPA s Advantage Site program approve a 31-acre tract in Airport Industrial Park. The former Advance Auto Parts distribution center should have a new tenant in 2010, with details of the lease being worked out late in Several projects that were put on hold in 2009 could come to fruition as the economy recovers. Attracting second and third tier suppliers for the VW plant under construction in Chattanooga is a priority. Clean-up continued at the former Gulf States Steel site, with the cost of Phase 2 of the project around $15 million. Completion of the new Career Technical Center at Gadsden City High School in January 2010 will help provide the skilled workforce required by new and existing industries. Despite the challenging environment, on balance Gadsden s service businesses held their own in Retail trade employment was unchanged during the year; the Coosa Town Center location vacated by Goody s was filled by Famous Labels in the summer. However, a planned multiphase redevelopment of the River Trace Golf Course in East Gadsden fell through late in the year when payments were not delivered. CBS Supply purchased 60 acres of a 675- acre tract near Pleasant Valley Road and I-59 that was bought by Etowah County in 2008 for commercial or industrial development. The company s proposal for an investment of $200 million over the next three years in a charity electronic bingo development was on hold at yearend while they awaited certification that the planned bingo machines comply with county and Alabama Supreme Court dictates. If the project goes forward, CBS Supply is also obligated to build a first-class hotel and a 3,000-seat entertainment venue. Healthcare investment continued in 2009 with Gadsden Regional Medical Center finishing a remodeling project in April, following completion of the $30 million Centennial Tower in October Social services in the area will benefit from a new building for the county s Department of Human Resources that is scheduled to open in the spring of And the city of Gadsden awarded a bid for construction of a community center at Banks Park. Population 30 Alabama Metropolitan Areas

14 in the metro area rose a slight 0.2 percent to an estimated 103,303 residents in New residential construction was sharply curtailed during the first 10 months of 2009; the 49 single-family units permitted were down from 84 for the same period in 2008 and no multi-family units were planned. A total of 515 homes were sold through October, a drop of 20.3 percent from Prices held up, however, with the area s FHFA House Price Index up 0.9 percent in the third quarter of 2009 and a larger 1.1 percent compared to third quarter Gadsden was the only metro seeing a decline in bank deposits for the year ending June 30 total deposits in FDIC-insured institutions slipped 1.4 percent. The number of banks doing business in the area rose by one to 12 and branches were unchanged from 2008 at 28. Recently, income has been rising more strongly in Gadsden than in the state. Although 2008 per capita income of $29,450 ranked ninth among the metros, the annual increase of 3.9 percent ranked fourth. An increase of 4.1 percent in FY2009 median family income also was the fourth highest. At $32,330, the 2008 average annual wage for all industries amounted to 89.4 percent of the state average. Huntsville An expanding federal government sector and a growing list of businesses focused on scientific and technical areas including information technology, engineering services, aerospace, missile defense, and biotechnology have the Huntsville area well-positioned for a strong recovery in Huntsville was among the last of Alabama s metro areas to fall into recession, with nonagricultural employment slipping below year-ago levels in November The number of nonfarm jobs averaged 210,000 for the first 10 months of 2009, below the 214,300 workers of the same period in 2008, but 900 above the same period in Payroll employment in October 2009 was down 4,700 (-2.2 percent) from a year ago. Goods producing industries bore the brunt of the losses manufacturing shed 3,100 jobs during the 12 months and construction lost 900. Gains in some service providing sectors almost offset losses in others for a net decline of just 700 positions (-0.4 percent). Retail trade (-1,500 jobs) and professional and business services (-1,400) felt the most severe effects of the recession. The area s sizeable government sector added 2,200 jobs through October, including 1,100 in federal government work. Education and health services expanded to serve a growing population, creating 900 new jobs. BRAC-related job and population gains will boost the Huntsville metro s position as a net importer of workers. In October 2009 there were about 28,000 more jobs than employed residents. However, a decline in total employment of 14,036 (-7.2 percent) paired with a contraction of just 3.3 percent in the labor force (-6,667 workers) pushed unemployment to 7.9 percent in October, up from 4.0 percent a year earlier but still the lowest of the metro areas. Growth in the area s economy has been the strongest in the state in recent years. The current dollar value of goods and services produced rose 63.9 percent between 2001 and 2008, including a gain of 6.4 percent in 2008 that compares to a statewide increase of 3.3 percent. Government sector output rose 68.1 percent during the seven years and accounted for an above-average 23.6 percent of the total in Growth in GDP generated by the area s professional and business services businesses has been the driver of the decade, however, with an increase of over 111 percent bringing the industry s share of total output to 22.7 percent. Professional and technical services accounted for 85.4 percent of sector GDP in 2008; output has risen percent since 2001 to surpass the value of production generated by Huntsville area manufacturing firms. Manufacturing accounted for a slightly above average 13.5 percent of jobs in the metro in October Employment fell by 3,100 (-9.9 percent) during the year, with losses including 1,500 jobs in transportation equipment manufacturing and 600 at companies that produce computer and electronic products. Toyota cut production at its Huntsville truck and SUV engine plant early in the year, suspending the V-6 and offering a voluntary exit program for employees, adding nonproduction days, and cutting executive pay and bonuses. The future looks solid, however in August Toyota announced a $147 million expansion that will add 4-cylinder engines to the current V-6 and V-8 lines in 2011; at least 240 workers will be hired late in But production at Limestone County s Delphi Saginaw Steering System plant ended with the departure of the last 439 employees on June 26. Continental Automotive began paring its Huntsville workforce down from about 1,280 as it looks toward closing by year-end A $21.7 million expansion at Federal- Mogul Sealing Systems announced in 2009 will add 110 jobs. Palco Telecom Services new plant will employ 50. In nondurables manufacturing, Athens lost a major employer when Pilgrim s Pride shut down in September, laying off 640. American Leakless is investing in a new Athens plant that will employ 40. The area continued to market a TVA megasite off I-65 in Tanner, where a new interchange opened in the fall, as well as the Sewell property that was considered for the Volkswagen factory. New jobs in the federal government sector helped prop up Huntsville area employment during Job moves associated with the 2005 BRAC transfers will continue into 2011; in mid-december about 2,400 of 4,651 government positions being transferred to Redstone Arsenal were reported to have moved, with about 56 percent taken by people from outside the area. The Missile Defense Agency, ahead of schedule with the transfer of about half of its 2,800 jobs, is planning to further grow the workforce at the campus under construction at Redstone, adding about 200 Alabama Metropolitan Areas 31

15 jobs annually through its Career Development Plan as it looks to fill future retirements and separations. FY2010 appropriations of $7.7 billion are providing funding for the agency s Ground-based Midcourse Defense (GMD), THAAD, and Patriot PAL-3 missile programs as well as for adapting the SM-3 for use on land and for unmanned aerial vehicle research. However, Boeing, which transferred about 50 jobs with the relocation of headquarters of its missile defense systems division to Huntsville in 2009, laid off about 140 employees during the year due to cutbacks in the GMD program. Construction progressed on headquarters for the Army Materiel Command s more than 1,350 workers and for about 360 employees of the U.S. Army Security Assistance Command. A building for the 2nd Medical Recruiting Battalion was ready in April; August groundbreakings for the Rotary Wing Center at Redstone airfield and headquarters for the Redstone Test Center have the last BRAC-related construction on track. Other building at Redstone includes the Missile and Space Intelligence Center and the Propulsion and Explosives Technology Center, which opened in the summer. The state announced plans to accelerate road projects to serve BRAC-related transportation needs. Military and defense work generated numerous contract awards, new facilities, expansions, and new entrants to the Huntsville metro area during WestWind Technologies opened an Aircraft Modification and Integration Center that will customize helicopters for foreign military sales. Tyonek could employ 400 in the Port of Huntsville air cargo building it leased for testing and working on Army helicopters. Agility Defense and Government Services selected Huntsville for its U.S. headquarters. MEI Technologies new office will facilitate work on a five-year $158 million test and evaluation contract with the Army. Other firms with new facilities included SCoRe Solutions, Garver, GATR, Analytic Services, SL1, MWH Americas, CRS Engineering, nlogic, Freedom Information Systems, and DMD. A $1.1 billion award will support Raytheon s development of a Patriot missile defense system for Taiwan. SAIC won a contract late in the year for up to $848 million over five years for engineering and support services to the Army s Systems Engineering Directorate; the funding will benefit a team of 238 subcontractors with a presence in Huntsville. The Department of Defense s Defense Acquisition University completed a new building late in the year that will grow its role supporting the defense community. Local colleges and universities are working to help provide the workforce and support needed by both defense and support firms Calhoun Community College offered free tuition scholarships for engineering students, while the Army Garrison Command at Redstone partnered with Drake State Technical College on a cooperative educational program. New majors in management of acquisition and contracts, enterprise systems, and logistics and supply at Athens State are targeted to BRAC needs. AMCOM awarded the University of Alabama in Huntsville a $75 million contract for a Systems Management and Production Center to work with Redstone; the University s Center for System Studies provides systems engineering assistance to area firms. Marshall Space Flight Center s manned space flight program, Constellation, which saw a successful test of the Ares I-X rocket in October, received $3.46 billion in federal funding for FY2010. The Center, which employs about 2,540, is also leading development of a new upper stage for Ares I and the Ares V cargo launch vehicle. With 70 percent of space workers eligible to retire in the next five years, ongoing recruitment is a priority. NASA work at Marshall brought expansions at existing firms such as NeXolve in 2009 as well as new entrants to Huntsville including Draper Research Lab and ASRC Aerospace. A Dynetics-led team won a $335 million five-year contract for information technology services at Marshall. The area has been reaching out to aerospace workers at Kennedy Space Center who could be out of a job when the current space shuttle program is shut down. Although the weak economy clouded the outlook for the Huntsville area s retail sector when bankrupt national companies left vacant spaces during 2009, activity should pick up in 2010 as job and population gains provide opportunity. Bridge Street completed The Station entertainment complex in the summer and saw the opening of The Sports Authority anchor in Phase 2. Construction is slated to begin in 2010 on the Centre s second office tower. SpringHill Suites at the Constellation mixed-use project was on track and the development was marketing restaurant outparcels during the year. Dick s Sporting Goods opened at Valley Bend at Jones Farm in the spring. A number of mixed-use projects that incorporate restaurants, retail, offices, and residential are planned or under construction, including Resonant Pointe across from Huntsville Hospital, Eighteen Watercress on the site of the old Monrovia Golf Course, a public/private development in downtown Huntsville, and the Harris Hill project in northeast Huntsville. Healthcare in the area will become more convenient when the new Madison Hospital opens in February Construction of the $71 million, 60-bed hospital that will be operated by Huntsville Hospital and employ around 500 got underway late in The hospital will be a catalyst for medical facilities development in the area, including the planned $10 million Madison Medical Park. BlueCross BlueShield s Huntsville service center opened in the fall current employment of 70 could grow to 200. However, Aramark laid off 163 in healthcare support services late in the year. The city-county jail expansion was finally complete in April. Both job opportunities and quality of life brought numerous kudos to the metro area during In November BusinessWeek selected Huntsville as the #2 city set for a recovery in the jobs market. Forbes names Huntsville one 32 Alabama Metropolitan Areas

16 of its Leading Cities for Business in April and in July tagged it among the Top 5 Best Cities for Recession Recovery; Fortune Small Business called Huntsville the top mediumsized city among Best Places to Launch. Madison was touted by CNNMoney.com as one of America s Top 50 Small Towns and by U.S. News & World Report as the second Best Place to Grow Up. Kiplinger s named Huntsville the nation s Best City in 2009 and RelocateAmerica chose it as one of the Top 10 Places to Live. Huntsville continued to see the strongest population growth among the state s metros with a 2.4 percent gain in 2008 adding over 9,300 residents. Given the large number of workers at Redstone Arsenal and Cummings Research Park, a group is studying the possibility of developing light rail that would initially service those areas. The concept of secure rail into the Arsenal is of particular interest since a southern bypass was rejected due to security concerns. Public school construction is proceeding as the area prepares for ongoing population growth. Huntsville s Mill Creek Elementary was under construction and funding was approved for a new elementary school in Big Cove as well as for a replacement Lee High School. Limestone County s Blue Springs Elementary will open in fall 2010; Madison is building a new high school in an annexed area of the county. New dorm space will enable the University of Alabama in Huntsville to require freshmen and sophomores to live on campus in the fall of The City of Huntsville continued to pursue public/private partnerships that will increase residential living and activity in the downtown area. Residential building has held up relatively well during the past year, with 1,860 permits issued for single-family homes during the first 10 months of 2009 just 4.0 percent below the same period in At 575, multi-family units permitted were up 51.7 percent compared to the previous year. A total of 6,593 homes were sold through October, an 11.6 percent decline from a year ago. However, Madison County saw an all-time record 526 sales close in November. The FHFA House Price Index had Huntsville metro area home prices up 1.2 percent in third quarter 2009 compared to a year ago and essentially unchanged from the prior quarter. With more than half a million square feet of new spec commercial space in the first half of 2009 and tight lending conditions, development is expected to shift to a build-to-suit mode. Huntsville s banking sector saw the strongest growth among the state s metros during the year ending June 30, Deposits in FDIC-insured institutions rose18.7 percent and the number of banks increased by one to 25, with six new branches bringing the total to 115. Per capita income rose 3.8 percent to $37,938 in 2008, second highest among the metro areas. At $67,500, FY2009 median family income in the Huntsville area was the highest in the state and $3,500 above the U.S. median. Wages across all industries averaged $44,540 in 2008, well above the state and national averages. Mobile Progress made in 2009 on the $4.65 billion ThyssenKrupp steel plant as well as infrastructure construction at Alabama State Port Authority facilities should contribute to a strong rebound in the Mobile economy during Shipbuilding could also be a growth industry, while education and health services will continue to provide stability and job gains. Mobile was among the last of Alabama s metro areas to fall into recession in terms of jobs, with monthly nonagricultural employment consistently below year-ago levels since November Payroll jobs totaled 180,400 in October 2009, down 4,600 (2.5 percent) from a year ago. Goods producing industries accounted for over half of the job losses natural resources, mining, and construction shed 1,700 jobs (-11.0 percent) and manufacturing employment declined by 900. On the serviceproviding side, only education and health services managed to post a gain, adding 800 positions. Employment in each of professional and business services, financial activities, and state government fell by 600 between October 2008 and October The Mobile metro, which comprises just Mobile County, is a net importer of workers. There were 162,727 working residents in October, about 17,700 fewer than the number of jobs located in the area. Employment was down 13,150 from a year earlier, a 7.5 percent decrease that was the third lowest among the 11 metros. Perhaps looking ahead to upcoming opportunities, out-of-work residents generally stayed active in the labor force a decline of just 1.8 percent during the 12 months pushed area unemployment from 5.6 percent in October 2008 to a relatively high 11.0 percent. Mobile s economy expanded a strong 5.4 percent in 2008, well above the state s 3.3 percent GDP growth rate and second only to Huntsville s 6.4 percent. Over the entire period from 2001 to 2008, however, the total value of goods and services produced in the area rose only slightly faster than the state average with an increase of 43.6 percent. Almost two-thirds of Mobile s economic output comes from services (64.2 percent versus 58.8 percent for the state). Manufacturing contributes a below-average 13.6 percent of the area s output and just 8.6 percent of jobs. That is about to change, however, as the ThyssenKrupp plant becomes fully operational over the next several years, producing highvalue steel and generating as many as 2,700 jobs. While weak economic conditions in 2009 forced the company to delay completion of the stainless steel portion of the plant, the larger carbon steel rolling mill should start-up in spring 2010 as scheduled. The mill will process raw steel slabs imported from Germany until a new raw steel plant in Brazil can be completed. At the end of October 3,540 Thyssen- Krupp applicants had completed AIDT pre-employment training for what will eventually be 2,700 positions. Applicants are largely from the region, but include experienced Alabama Metropolitan Areas 33

17 steel workers from outside the area. Over 4,500 construction workers were on site in the fall and 400 hundred were already employed by the carbon steel operation. Carbon steel employment was expected to rise by over 100 by yearend and reach about 1,000 in early summer The carbon steel portion of the plant accounts for around 70 percent of ThyssenKrupp s planned $4.65 billion investment and will employ about 1,900. With start-up of the stainless steel plant postponed at least a year, the workforce has been frozen at the 177 already hired. Work on the stainless steel melt shop got underway in the fall, although its opening could be pushed back from 2012 to 2014 as demand for the product and the company s finances recover from the recession. Warehouses and a training facility were constructed at the site during the year, although part of the river terminal was delayed. While completion of several projects led to modest layoffs at shipbuilder Austal USA in 2009, 2010 should see employment growth. The company delivered the littoral combat ship (LCS) Independence, built under contract with General Dynamics, to the U.S. Navy late in the year. Commissioning of the USS Independence is set for January 16 in Mobile, the first time a ship has been commissioned there since World War II. The company is set to begin work on a second LCS as the Navy continues to evaluate awards of future LCS contracts. Austal also got the go-ahead in mid- December to begin construction of the first of a potential 10 Joint High Speed Vessels that it will build for the military. An $88 million investment in the first stage of a Modular Manufacturing Facility should have Austal well-positioned for cost-efficient production. C&G Boatworks was selected to construct two more patrol boats for the Navy, adding to a previous order for four. However, Bender Shipbuilding and Repair was forced into Chapter 11 bankruptcy, with VT Halter Marine making a bid for its assets early in Local shipyards received $6.3 million in federal stimulus grants for capital improvements during the year. Mobile s new Maritime Science Center should open in summer 2010, with capability to train up to 700 annually in skills needed by the shipyards. In other industrial developments, Armstrong World Industries idled 172 with the closing of its flooring plant in May; 70 will lose their jobs when the New Era Cap Company distribution closes early in Economic conditions led SSAB to delay some of the $460 million announced in 2008 for expansion of its Mobile area steel plate plant. And Teledyne Continental Motors implemented several layoffs at its Brookley Field airplane engine plant. An expansion at umbilical tube manufacturer Aker Solutions should create 30 jobs. EADS opened a maintenance, repair, and overhaul Delivery Center at Mobile Regional Airport; Mobile is headquarters for Airbus Military North America. However, prospects for the Northrop Grumman/EADS team landing a re-bid $40 billion Air Force refueling tanker contract faded as Northrop considered not submitting a bid due to the proposed new guidelines. EADS plans for a $600 million aircraft assembly operation in Mobile hang in the balance. Sizeable reductions in coal shipments and the negative impact of the recession on shipments in general depressed revenues at the Alabama State Port Authority in Mobile for FY2009, although container, steel, forest products, and rail business are expected to pick up later in Recent capital investment has greatly expanded the Port s capacity and capabilities. The Mobile Container Terminal closed deals with Maersk, Hyundai, and American President Lines during 2009 as it builds up business at the expanded facility. Engineering and design work progressed during the year on a bridge that will link the terminal to a proposed $75 million intermodal container transfer facility at Choctaw Point. Work was almost complete on the $86 million Pinto Island Terminal that will service ThyssenKrupp. About $100 million has been spent on upgrades to the McDuffie Coal Terminal, with another $4 million budgeted in FY2010. The Port is positioning itself to take advantage of the Panama Canal expansion that should be complete in 2014 the container terminal is built for post-panamax ships and the economic stimulus is funding a new turning basin that will accommodate the larger vessels. There were a number of developments in the metro area s service industries during Healthcare and social assistance as a whole was a growth sector, adding 500 jobs in Mobile County during the year ending October 2009, although most local hospitals eliminated a modest number of positions early in the period. Higher than expected patient volumes had the University of South Alabama s (USA) Mitchell Cancer Institute, which opened in November 2008, adding to employment. The University s Research and Technology Park is considering a new building since retirement plan services provider DailyAccess filled the remaining current space in the spring. RSA s purchase and renovation of the 34-story former AmSouth building will increase Class B+ office space in downtown Mobile; completion is scheduled for March The service sector got a big boost from an $8.5 million headquarters, data center, and customer call center for Ryla the Saraland location started up with more than 500 employees on June 30 and almost immediately began recruiting another 600 workers to meet client demand. The number of cruise ship passengers traveling through Mobile got a boost in November when the larger Fantasy replaced the Holiday; Carnival Cruise Lines will replace the Fantasy with the 2,052-passenger Elation in May Visitors to downtown Mobile will have a new destination late in 2011; the Mobile City Council voted to secure financing to help fund a planned interactive maritime museum, GulfQuest, being built on the waterfront. The Alabama Motorsports Park in Prichard was on hold, however, as investor group Gulf Coast Entertainment worked to line 34 Alabama Metropolitan Areas

18 up financing and branding to replace the dropped Dale Earnhart Jr. affiliation for the $640 million project. Although 2009 was a difficult year for commercial real estate, education-related projects have helped support nonresidential construction in the Mobile area. USA has invested about $108 million over the last several years and construction began in the fall on the $50 million Shelby Hall Engineering and Computer Sciences building. Spring Hill College was finishing up $100 million of renovations and expansion with a $12.8 million student center. A $29.6 million Saraland High School opened at the end of 2009 to anchor the city s newly-independent school district. With population growth moving to the west, Mobile County has plans for a new elementary and a middle school near Creola, while considering consolidating or closing other below-capacity schools. Total population growth in the metro was estimated at just 2,212 in 2008, an increase of 0.5 percent. There were 882 permits issued for singlefamily homes during the first 10 months of 2009, down a better-than-average 22.8 percent compared to the same period in Apartment development picked up 4.8 percent to 763 units. However, the total number of homes sold was down an above-average 19.5 percent for the same period. Home prices as measured by the FHFA House Price Index slipped in the third quarter, down 1.1 percent from the prior quarter and 0.8 percent compared to a year ago. Deposits in FDIC-insured banks in the Mobile metro were up 6.6 percent for the year ended on June 30, less than the state s 9.0 percent increase. The number of banking institutions increased by two to 20, while eight additional branches brought the total to 123. Per capita income improved at a strong 5.0 percent pace during 2008, although at $30,347 it ranked 8th among the metro areas. An increase of 3.3 percent brought median family income to $49,500 in FY2009, ranking 10th. Average annual wage of $35,440 for 2008 was 98.0 percent of the state average. Montgomery The federal government sector, centered around Maxwell-Gunter Air Force Base, lent stability to the Montgomery metro economy during 2009, while favorable consumer opinions of Hyundai vehicles made in the area as well as innovative marketing helped the automaker fare better than most. However, the area fell into the jobs recession at the same time as the state in June 2008 and most sectors saw employment dwindle during the year ending in October. Overall, nonagricultural employment fell by 6,000 (-3.3 percent) to 173,900. Goods producing industries lost 2,700 jobs, about 10 percent of their October 2008 total; construction shed 1,000 workers and manufacturing cut 1,700 during the 12 months. Service providing businesses dropped a total of 3,300 jobs (-2.2 percent);the largest declines were in professional and business services (1,000), retail trade (800), leisure and hospitality (600), and financial activity (500). Falling revenues hurt state government services, with employment in the metro that includes the state capitol sliding by 400. Montgomery s workforce contracted by almost 6,700 residents between October 2008 and October 2009, a 3.9 percent decline that was steeper than Alabama s 3.4 percent decrease. Total employment fell by around 13,200 (-8.1 percent) during the 12 months, pushing unemployment up from 5.8 percent to 10.0 percent, ranking in the middle of the metros. Although the current dollar value of goods and services produced in the area increased an above-average 4.0 percent in 2008, GDP growth of 40.5 percent between 2001 and 2008 was weaker than the state-average 43.3 percent. At 18.5 percent, the share of output generated by goods producing industries in 2008 was third lowest among the metros, while the 23.6 percent coming from government was tied for third highest. Construction activity has fallen 18.0 percent over the last two years. Output from the Montgomery area s manufacturing sector climbed 77 percent during the period from 2001 to 2008, which includes production start-up at Hyundai and supplier firms. Even with the automotive sector, manufacturing contributed just 10.0 percent of Montgomery area jobs in October 2009 and 12.7 percent of 2008 GDP. After slumping early in the year, sales of Hyundai s locally-produced Sonata sedan and Santa Fe SUV began to pick up in August and the plant moved from a three-day work week back to a five-day schedule. Total production passed 20,000 in September for the first time since 2008; demand for the Santa Fe rose more than 50 percent in September and 70 percent in October compared to a year earlier. Sales of the 2010 Sonata were strong toward year-end, with fleet purchases an important part of demand. Daily production ramped up to 1,000 vehicles per day in November, but dropped somewhat in December as the plant shifted Sonata production to the redesigned 2011 model. The plant s one- millionth vehicle rolled off the assembly line at the end of November. A second engine plant that opened in Montgomery in 2008 is supplying the new Sonata model s 4-cylinder engines, while the original 6-cylinder factory is making engines for both the Santa Fe and the 2011 Kia Sorento, being produced just over the east Alabama state line in West Point, Georgia. The company is extending through 2010 the successful Hyundai Assurance Program that lets a buyer or lessee return a new vehicle for up to a year if they lose their job; the campaign earned Hyundai Advertising Age s Marketer of the Year award. International Paper is investing $40 million to rebuild one of the recovery boilers at its Prattville mill. Other Montgomery area developments in 2009 include an expansion at Hager Hinge that will add 40 jobs and a $3.7 million investment at Alabama Metropolitan Areas 35

19 Elmore County s Neptune Technology Group. However, SABIC Innovative Plastics cut 53 workers at its Burkville plant in March, while Prattville s Continental Eagle, cofounded 177 years ago by Daniel Pratt, announced plans to move the cotton gin manufacturing operation to India. While Wetumpka lost its Fruit of the Loom carpet yarn plant in the spring, a new gelato manufacturing and distribution business was established in the city. Montgomery s distribution focus grew with the March opening of Turennne PharMed- Co s headquarters and medical supply distribution operation in Montgomery Industrial Park. Montgomery s banking sector was shaken by the mid- August failure of Colonial BancGroup, the third largest statechartered bank with $25 billion in assets. Colonial s downfall was the largest bank failure in the nation in 2009 and the first in Alabama since FDIC regulators seized the bank and sold it to North Carolina-based BB&T for a seamless transition that allowed customers to continue to access accounts and services. BB&T agreed to purchase about $22 billion of the assets and assumed the $20 billion in deposits; the failure cost the FDIC s Deposit Insurance Fund an estimated $2.8 billion. While most direct customer contact Colonial employees were able to keep their jobs, some of the 1,000 Montgomery headquarters workers in administrative and support jobs were let go with severance pay and job-search assistance. Employment in the metro s retail sector fell by 800 during the year ending in October, although general merchandise stores added about 100 employees. Prattville continued to see retail development, adding The Exchange to the shopping cluster north of Montgomery along Cobbs Ford Road that includes Prattville Town Center and High Point Town Center, home to a Bass Pro Shops. High Point added several shops and restaurants during the year, but its anchor space is full so larger stores turned to The Exchange in Both Hobby Lobby and Academy Sports and Outdoors opened there in the fall and a Kohl s is slated for completion in the fall of Academy Sports also completed a Montgomery location near the Shoppes at East- Chase in the summer. Serra will open a car dealership for Indian-made Mahindra vehicles in the city. Retail vacancies grew, however, as bankrupt national retailers pulled out. The City of Montgomery has seen sales tax revenues slip over the last several years as Prattville s retail growth provides convenient shopping for some residents. Barnes and Noble closed its store at the declining Montgomery Towne Center in June and efforts to redevelop shuttered Montgomery and Normandale Malls were on hold. Office and retail space was completed in Montgomery s Hampstead development early in the year. The metro area benefitted from tourism dollars generated by the Navistar LPGA Classic, held at Prattville s Capitol Hill course (part of the Robert Trent Jones Golf Trail) in September; the tournament will return in Montgomery played host to the 22nd Air Force Information Technology Conference that drew about 6,000 in late August. Montgomery s downtown development and revitalization continued, with a pedestrian bridge that will complete the intermodal project and link the riverfront observation tower to the intermodal facility. Autauga County s construction of a sewer system to serve the new Marbury High and Pine Level Elementary schools could spur residential growth. Continuing revitalization efforts in west Montgomery include the city-led Lanier Place subdivision project and replacement of Tulane Court with a modern housing and retail development. As part of the West Montgomery Initiative, the city purchased land for a new park on Fairview Avenue. Population in the Montgomery metro as a whole was unchanged in 2008, with losses in Montgomery and Lowndes counties matching population gains in Autauga and Elmore. With a strong base in state government, Maxwell-Gunter Air Force Base, and Hyundai, Montgomery s commercial real estate market fared relatively well in The primary weakness was in the banking sector, where the collapse of Colonial BancGroup could add to vacancies created by the earlier merger of Regions and AmSouth banks. Tight lending conditions also contributed to vacant warehouse space. Residential real estate did not fare as well permits for single-family home construction fell 36.8 percent to just 304 for the first 10 months of 2009 compared to the same period in 2008 and there continued to be very few permits issued in the multi-family market. The total number of homes sold was down an above-average 19.3 percent yearover-year. House prices measured by the FHFA House Price Index dropped 2.2 percent during the third quarter of 2009 and 2.0 percent compared to a year earlier, second highest among the state s metros. Bank deposits at FDIC-insured institutions increased a strong 13.1 percent for the year ending on June 30 prior to the Colonial failure. The number of banks rose by two to 22, although branches fell by two to 113. Per capita income growth of 5.0 percent in 2008 compares to a state-average 2.7 percent gain; at $35,845 the area ranked third. Median family income increased by a below-average 2.3 percent to $57,700 in FY2009. Average annual wages of $35,860 in 2008 were 99.1 percent of the state average. Tuscaloosa Strong enrollment growth at The University of Alabama, sizeable influxes of visitors for the University s home football games and other sporting events, and a growing healthcare industry helped support the Tuscaloosa metro during However, the area s large automotive manufacturing exposure was a negative factor as the effects of the recession deepened and consumer spending and credit tightened. Still, Tuscaloosa was among the last of 36 Alabama Metropolitan Areas