The Center for Business and Economic Research on March 31 issued a special report “COVID-19 and the Economy,” and it is predictably bleak.
“Business investment spending has been mostly weak for the last couple of years. COVID-19 effects and the large drop in oil prices will most likely push business spending into much deeper negative territory. Weaker economic growth in the rest of the world will also hurt Alabama’s exports; in 2019, Alabama exports to China, the state’s third largest trading partner, totaled $2.2 billion, about 11 percent of the state’s total exports. The global economy is most likely already in recession. Overall, the length of the downturn and the subsequent recovery will depend on how strong the policy responses (both monetary and fiscal) are and how these policies help businesses, state and local governments, and households weather the shock of the COVID-19 pandemic.”
Sectors of the state economy hardest hit by the virus crisis, says the CBER, represent 58 percent of the total employment in Alabama — “travel and travel-related businesses, food services and eating places, tourism and leisure, support services, auto dealers, gas stations, education, manufacturing firms that rely on exports and/or overseas suppliers for their inputs, and other businesses that depend on consumer and business spending.”
The Center for Business and Economic Research is an outreach unit within the Culverhouse College of Business at the University of Alabama.
The COVID-19 report was written by Sam Addy, associate dean for Economic Development Outreach and senior research economist, and Ahmad Ijaz, CBER’s executive director and director of economic forecasting.
