Mobile leaders express optimism for 2016 in ‘State of the Economy’
The Mobile skyline as seen from the Port of Mobile. (Mike Kittrell/Alabama NewsCenter)
The opinions expressed might represent a small fraction of Mobile area business owners, but responses to the port city’s first ever “State of the Economy” survey indicate overwhelming optimism for hiring and continued growth in 2016.
“We had a low response rate, so I’m not claiming this is scientific in any way, but we are very encouraged by the various (company) sizes and sectors represented, and I feel like the results reflect a pretty good cross-section of the local economy,” Bill Sisson, president and chief executive officer of the Mobile Area Chamber of Commerce, said.
The survey results were made public earlier this month during the business advocacy group’s first-ever State of the Economy Forum. And while only 7 percent of the chamber’s membership participated in the survey, it provides a crystal ball-look at Mobile area employment, revenues and profits for 2016, and what Sisson called “other measures of economic health.”
In addition, the chamber’s Partners for Growth investor companies responded to their own survey gauging job growth and capital investment during the past 18 months. The survey showed those companies have collectively announced and/or created 2,148 new jobs and invested $936 million during the period.
“The biggest development in the past five-year cycle has been the increase in wages, leading to a lot of local prosperity, and we’re seeing it reflected in more retail development, especially more upscale development,” Sisson said.
Indeed, the average salary of jobs recruited by the Mobile chamber during the past decade is $55,959. That’s nearly 40 percent higher than the $40,000 average annual wage the Partners for Growth committed to recruiting to the area during a five-year development campaign, which runs through 2017.
The $10 million economic development program has recruited 42 new businesses and assisted with 86 expansions at existing companies since its 2006 inception. The result: capital investments totaling $8.5 million and the creation of more than 17,400 jobs with average annual salaries just under $50,000. Alabama Power’s Mike Saxon and Brian Willman of Regions Bank co-chair the Partners for Growth initiative.
Sisson said he is strongly encouraged by the 2016 hiring projections indicated in the general membership survey results. “You can see that 2015 was a good year for our local employers, but what’s more important to notice is that the majority feel like 2016 is going to be even better,” he said.
According to the survey, 38 percent of respondents reported employing more people in 2015 than 2014, while payrolls for 51 percent of respondents held steady. Looking forward, only 2 percent of respondents anticipated having fewer employees in 2016 than 2015, with 42 percent projecting hiring increases and 56 percent projecting flat employment.
Sisson said manufacturing gains appear to be a clear-cut leader as Mobile continues its post-recession recovery. According to the U.S. Bureau of Labor Statistics (BLS), manufacturing jobs in Mobile County grew by 38.1 percent between the first quarters of 2010 and 2015. The state average during the same five-year period was 9 percent, while the national average was only 7.7 percent.
“You see that 38 percent increase? 2015 was a big part of that obviously, and it’s a trend we’re expecting to continue,” Sisson said. “We’re beginning to see some jobs growth in the aerospace sector, continued growth in maritime and increases in the chemical sector.”
Mobile County ranked second in job creation statewide for the period spanning first quarter 2014 to first quarter 2015, BLS reported. During that period Mobile County added 2,000 new jobs, which translates to a 1.2 percent uptick in employment. By comparison, Montgomery County added only 43 jobs. Madison County added 3,699 jobs, an increase of 2.1 percent. Jefferson County lost 1,635 jobs, a 0.5 percent drop.
Looking forward, Sisson projects continued growth in aerospace and aviation as Airbus ramps up production at its $600 million U.S. manufacturing facility at the Mobile Aeroplex at Brookley. He also sees a boost to the area’s transportation and logistics sector as the Alabama State Port Authority’s Intermodal Container Transfer Facility comes online in mid-2016. Mobile’s chemical sector should also see sustained growth, especially if energy prices remain as low as projections indicate, he said.
“The name of the game is economic development, but we’re certainly not putting all of our economic development eggs in one basket,” Sisson added. “That said, we will continue to focus on our strengths, especially in terms of cultivating an entrepreneurial ecosystem that attracts high-tech, high-wage jobs.
“It’s only a matter of time – and good timing – so I’m bullish about that as well,” Sisson said.
Mobile Area Chamber of Commerce ‘State of the Economy’ survey
- 76 percent of respondents said the economy is faring better now than it was seven years ago, while 59 percent said it is stronger than two years ago; 26 percent said it is stronger than six months ago
- 82 percent expect the Mobile economy to improve in the coming year; 38 percent predict growth in the national economy during 2016
- Nearly 67 percent expect Mobile’s 7.7 percent jobless rate to decrease in 2016; nearly 32 percent expect it to remain flat
- Nearly 71 percent believe area job creation in 2016 will outpace the 1,679 jobs created in 2014
- 62 percent anticipate increased revenue in 2016; 31 percent expect flat revenue; 7 percent project revenue decreases
- 56 percent project increased profits in 2016; 33 percent anticipate no change; 11 percent expect lower profits
- 22 percent plan to expand in 2016; 67 percent anticipate no added investments; 12 percent are unsure
- 24 percent expect to increase equipment spending in 2016; 67 percent expect equipment spending to remain flat; 9 percent anticipate spending less
Source: Mobile Area Chamber of Commerce
Mobile County manufacturing at a glance
- Percentage of manufacturing employees increased from 8.6 percent in first quarter 2010 to 11.6 percent in first quarter 2015; statewide manufacturing employment barely increased during the same period, from 13.2 percent to 13.7 percent; national manufacturing employment decreased from 9 percent to 8.9 percent
- Area manufacturing wages increased 22.9 percent during the five-year period, compared to 18.1 percent nationally and 14.1 percent statewide
- Median household income increased 15.5 percent from 2009 to 2014, more than double the statewide average 7.5 percent. Mobile County’s current median income is $44,264
- Mobile County gross domestic product increased 11.3 percent between 2009 and 2014, compared to 10.3 percent statewide
- Mobile-based Austal USA is the second largest manufacturing employer in the state, with 4,000 employees
Sources: U.S. Bureau of Labor Statistics and Moody’s Economy.com
