Published On: 01.25.21 | 

By: 4250

Five trends powering Alabama’s economic recovery and growth in 2021

Alabama's thriving auto industry continues to expand. Mercedes-Benz U.S. International in 2020 added the Mercedes Maybach GLS luxury SUV to the production line at its factory in Vance. (contributed)

The pandemic threw a monkey wrench in Alabama’s economy last year, interrupting a golden period of substantial growth and casting doubt on whether the momentum could be regained.

Fortunately for Alabama, the economic foundation built over the past several years looks resilient. Plus, the economic development pipeline for 2021 continues to flow with high-caliber projects that are poised to bring new jobs and investment to Alabama.

“Right now, there are many exciting developments unfolding across Alabama that showcase next-level innovation, highlight the extraordinary capabilities of our workers and contribute more horsepower to the state’s evolving economy,” said Greg Canfield, secretary of the Alabama Department of Commerce.

“While there are still many obstacles to overcome and healing to be done, sparks of vitality are lighting up in many sectors of Alabama’s economy,” he said.

Here are five major trends that are reviving Alabama’s growth potential amid the recovery.

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Trend No. 1: Hiring wave

No one is plugged into the state’s hiring outlook quite like Ed Castile, deputy secretary of the Alabama Department of Commerce and director of AIDT, the state’s primary workforce development agency.

Here’s the picture he’s seeing:

“Commerce and AIDT, specifically, are as busy as we have ever been as a program assisting companies with hiring workers for new and expanding jobs,” Castile said. “AIDT is working with over 130 projects that are hiring Alabamians in almost 40 counties.

“In AIDT’s 50-year history, this level of activity is record setting,” he said.

Castile said the companies being assisted by AIDT are creating jobs that pay average to well-above-average wages for their respective areas, which is a positive for Alabamians seeking employment.

“Credit goes to Gov. Kay Ivey, Secretary Canfield and the scores of local economic developers that demonstrate each and every day that Alabama is open for business,” Castile said.

Jobseekers should visit their local Career Center or go online to AlabamaWorks.com or aidt.edu and apply as soon as possible for jobs.

Alabama Commerce Secretary Greg Canfield speaks at an August 2020 event announcing Mazda Toyota Manufacturing’s additional $830 million investment at its Huntsville assembly plant, now under construction. (Mazda Toyota)

Trend No. 2: Auto growth

Alabama’s auto industry remains a dynamic growth engine for the state’s economy, overcoming challenges posed by the pandemic. Alabama’s automakers were able to resume production after adopting new safety measures, setting the stage for hiring to begin again in this vital industrial sector.

In fact, Alabama’s auto sector is poised to add more than 6,000 jobs in coming months, according to Department of Commerce projections.

The 2021 production launch at Mazda Toyota Manufacturing in Huntsville represents an important milestone in the history of Alabama’s auto industry. But that is hardly the only development adding spark to the sector’s growth trajectory in 2021.

Hyundai is adding 200 jobs at its Montgomery facility amid a major investment to introduce two new models to its Alabama production lineup this year – the Santa Cruz crossover and the Tucson SUV.

Mercedes-Benz, meanwhile, is ramping up to build two new electric vehicles at its Tuscaloosa County plant, which is generating activity among its suppliers ahead of the 2022 production launch.

Mercedes is also involved in a venture to open a $54 million EV parts facility in Vance that will create 373 jobs.

Amazon Logistics plans to open new delivery stations in Birmingham and Bessemer, creating hundreds of jobs and speeding up deliveries for customers. (Amazon)

Trend No. 3: Distribution node

During 2020, there was strong growth in Alabama’s distribution and logistics sector, with several significant projects in the Birmingham/Bessemer region but also spread across the state.

Altogether, these projects involve an estimated $500 million in new capital investment and the creation of at least 1,700 jobs in the state, according to Department of Commerce estimates.

Internet retail giant Amazon plans a pair of delivery stations in Jefferson County, making a significant investment and creating hundreds of jobs in Birmingham and Bessemer. These stations will complement the massive fulfillment center Amazon opened earlier this year in Bessemer.

In addition, Lowe’s Home Improvement is investing $61 million to open a distribution hub that will create 150 jobs, also in Jefferson County. The county is already home to distribution centers for Carvana, Dollar General and Home Depot, as well as a new $40 million logistics facility for FedEx Ground.

Other recent projects in the state include ALDI, which plans a regional headquarters and a distribution center in Baldwin County, and Dollar General, which has opened a cold storage facility in Montgomery. Meanwhile, distribution and logistics projects have landed in Tuscaloosa, Mobile and Coffee counties.

“Thanks to our central location in the Southeast, a robust infrastructure network and a motivated workforce, it looks like all roads are leading to Alabama,” Canfield said.

The Economic Development Partnership of Alabama’s Launchpad program has fueled the growth of 100 startups with more than $5 million in funding. One of those is Lucid Living Solutions, founded by Elizabeth Reed. (Alabama Launchpad)

Trend No. 4: Tech acceleration

Recruiting high-tech jobs has long been a priority for Alabama’s economic development team, and those efforts are poised to pay off in 2021.

“We expect to see a new wave of growth from technology-focused companies that are increasingly viewing Alabama as an attractive place for investment. In a way, this represents the ripples from the Shipt success story,” Canfield said.

“In addition, the pandemic has demonstrated that tech companies simply don’t have to be anchored in traditional hotspots, where the cost of doing business is often exorbitant,” he said.

Talent attraction and workforce development platforms, along with new accelerator programs, are positioning communities in Alabama for tech-sector job growth. New incentives for high-tech companies are also elevating Alabama’s attractiveness.

Established programs, including the Alabama Launchpad initiative and the Alabama Innovation Fund, continue to play a vital role in this effort.

Trend No. 5: Rural attractiveness

A bamboo rail tie produced by Resource Fiber undergoes testing in a lab. The company is opening its first full-scale bamboo products manufacturing facility in Sulligent. (Resource Fiber)

The growth potential of Alabama’s rural areas was reflected in several impressive projects launched in 2020, with investments announced in a range of industries across the state.

Alabama’s rural counties have long been a hotbed of activity for auto suppliers, and last year was no exception. New auto supply chain projects will bring more than $45 million in new investment and more than 285 jobs to communities such as Selma, Alexander City and Greenville, according to Department of Commerce data.

Other significant growth projects include:

“We’re committed to helping create jobs in Alabama’s rural areas through strategic economic development, and we are working hard to showcase the many advantages that these communities offer companies looking for motivated workforces and locations where they can find success,” said Brenda Tuck, rural development manager for the Alabama Department of Commerce.

This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.