Economy Shows Signs of Revival, New Opportunities in the Midst of COVID-19

Suburban grocery stores have seen an increase in business as residents began to work from home. (Photo by D. Mark Singletary)

There is sadness and economic disappointment in Alabama associated with the 2020 COVID-19 outbreak, but some indicators are pointing to signs of revival, at least on the economic front.

Total nonfarm payroll in metro Birmingham-Hoover indicates about 27,000 fewer workers employed in 2020 than had jobs in 2019, with 520,800 workers having jobs this year, according to government statistics.

But overall, unemployment numbers have dropped for Alabama in recent months. According to Alabama Department of Labor statistics, the latest official unemployment rate for Alabama is 5.6%. That unemployment data has improved since August, when it was reported as 7.9%. As a comparison, U.S. unemployment data shows a current rate of 8.4%, down from 10.2% last month.

There is other good economic news in all these numbers. The state of Alabama has collected $53 million more in sales tax revenues for this fiscal year than was collected in 2018-19. This year’s sales taxes collection year-to-date is $2.531 billion for Alabama.

There are other revenue categories that have seen significant increases as well. Gasoline tax collections have increased by $125 million this year and financial institution excise taxes increased by $50 million over last year’s collections.

On the downside, lodging taxes decreased by $12 million this year.

Where the Economy Is Flourishing

Breaking down these numbers by counties and cities shows which regional economies are flourishing.

Two suburban cities, Homewood and Vestavia Hills, have reported significant increases in sales tax collections this year, and local business leaders attribute the gains to grocery sales and service-oriented businesses.

Vestavia Hills Chamber of Commerce President and CEO Karen Odle (Source: Vestavia Hills Chamber of Commerce)

Vestavia Hills Chamber of Commerce President and CEO Karen Odle said that the number of grocery stores in Vestavia Hills, coupled with so many local businesses having opted to have their employees work from home, means that local sales have actually increased over last year’s numbers.

Odle said her organization has worked with her membership through the pandemic.

“We’ve changed the way we work with people, especially those that had to close for a period of time. Our chamber has worked through details with every member individually,” Odle said. “We call and talk about the issues with them and, hopefully, offer good solutions,” she added.

The city of Homewood also has seen increased revenues for this fiscal year, again primarily because there are so many large grocery and discount stores in the city limits. Sales reports from 2020 again reflect increases year-to-date.

Margaret Drennen, executive director of the Homewood Chamber of Commerce (Source: Homewood Chamber of Commerce)

Margaret Drennen, executive director of the Homewood Chamber of Commerce, offers reports similar to Vestavia Hills that local business and sales tax revenues are doing very well.

“Service providers and other internet component suppliers have actually thrived. Work from home supplies, companies with existing online sales and plans for adapting to online sales, see increases of 10% to 50% over last year,” Drennen reported.

Drennen also indicated that medical operations are healthy and almost pandemic-proof, according to her information.

“What we’ve seen, especially in the medical services community, is a realization that medical procedures and treatments cannot be deferred. Local medical facilities are really busy,” she added.

Community College Efforts

To help counter job losses, the Alabama Community College System has strengthened its programs for workforce training and development.

The Alabama Technology Network, part of the Alabama Community College System, is certified nationally to provide Alabama business and industry with extensive workforce training, technical assistance and engineering services necessary to sustain jobs, grow profits and remain cutting-edge; ATN adds another layer to the community college system’s role in business and industry in the state, according to Keith Phillips, executive director of ATN.

“Alabama’s community colleges and services hit the state’s workforce from every angle. We offer training for existing employers to reach their best success, on top of building programs and services that bridge students with the businesses that employ them before they even graduate via apprenticeships and co-ops,” he said.

“We work directly with business and industry to identify the needs of all Alabamians – from child care and health care to flexible hours for training and classes,” he said.

“Across the state, we are working side by side with community and business leaders executing practical strategies that equip Alabamians with the skills they need to succeed in the workforce,” said Alabama Community College System Chancellor Jimmy H. Baker.

“The coronavirus pandemic has certainly had an impact but every one of our colleges is committed to providing the flexibility and resources that students need to start or continue their education and training programs,” Baker added.

Another adjustment is a virtual format for Ready to Work, a free, industry-inspired training program that grants completers industry-recognized credentials and the opportunity take a free college course.

Gov. Kay Ivey recently awarded the Alabama Community College System $27.3 million in CARES Act funds to strengthen colleges’ technology and infrastructure. The funds included $8 million for a laptop loaner program to assist low-income and other students in special populations with remote learning, as well as $10 million for a statewide program that allows students to use college-owned software anywhere, even while off campuses. Individual colleges also distributed CARES Act funding directly to eligible students.

Alabama’s community colleges offer certification programs and work-based learning opportunities in Alabama’s top employer sectors of manufacturing, health care, construction, transportation and logistics, and information technology. Even Alabama’s top 50 high-earning occupations in health, management, postsecondary education, science and engineering can begin with certifications and degrees at the state’s community colleges, according to the state college system.