COVID may still have surprises in store, but as businesses begin to reopen post-pandemic, the state of Alabama could see “stellar growth,” say researchers at the University of Alabama Center for Business and Economic Research.
Supply chain bottlenecks, labor shortages and rising prices — coupled with uncertainty over the virus itself — are definitely of concern, the researchers say, but “low unemployment across Alabama coupled with increased output by the state’s manufacturing and service sectors should mean a rise in the value of goods and services produced in the state.”
Evaluating risks and benefits, the researchers predict a 3.4% growth to reach $213.5 billion in gross domestic product, following a 4.8% growth in 2021 and a 3.2% contraction in 2020.
“A 3.4% growth rate is great, considering the growth rate in the years before 2021,” said Ahmad Ijaz, executive director of the center. “It’s likely we will revise this upward, depending on how the data comes in from the fourth quarter of 2021 and the first quarter of 2022.
“The rate of increase in prices in 2022 may slow down some, but we will still see an increase in price levels in 2022,” Ijaz said. “Hopefully, it won’t be as significant as in 2021, but the changes in prices will continue albeit at a slower pace until the supply side issues and the labor market issues can be resolved.”
The Center for Business and Economic Research, part of the university’s Culverhouse College of Commerce, have predicted Alabama’s economic performance since 1980.
The full economic outlook is available here.
