Birmingham: Economy

Birmingham: Economy

Major Industries and Commercial Activity

For many years Birmingham was a one-industry town, dependent on the iron and steel industry. Today, though, Birmingham's economy relies more heavily on the medical industry as well as trade, finance, research and government. The major industrial investments in Birmingham have been in automotive components manufacturing and distribution, machinery, and the metals industries. At the base of the expanding telecommunications industry is one of two regional corporate headquarters of BellSouth Telephone Company. Birmingham is headquarters for the engineering and technical services of several power companies, including Alabama Power Company, ENERGEN Corporation, and SONAT. Metro Birmingham is a leading retail and wholesale trade center for Alabama and parts of Florida, Georgia, Tennessee, and Mississippi. According to the Alabama Department of Industrial Relations, projections for the fastest-growing occupations in Birmingham through 2012 include jobs in medical services. A mecca for health care and medical research, Birmingham boasts the University of Alabama Medical Center, known throughout the world for its research on the treatment of cardiovascular disease, diabetes, cancer, AIDS, and arthritis. Birmingham's Southern Research Institute, the largest nonprofit independent research laboratory in the southeast, has gained national prominence.

With a plethora of Birmingham businesses working in international trade and warehousing and with the city's nearby waterways, Birmingham is a major distribution center. The city's proximity to the Warrior-Tombigbee River System, which connects to the Tennessee-Tombigbee Waterway, enables Birmingham to be a major shipper of general commodities. Birmingham has also experienced significant growth as a transportation hub because of its central southeast location, and the fact that it is served by eight airlines, five air cargo services, approximately 100 truck lines, four railroads, and more than ten barge lines. Multimillion-dollar runway and cargo facility expansions at Birmingham International Airport took place in 2004 as part of the city's efforts to encourage further growth in the transportation and distribution industries.

Items and goods produced: cast iron pipe, transportation equipment (automotive, rail, and aircraft equipment), fabricated metal products, electronics, plastic products, office furniture, containers, paper products, and fire extinguishers

Incentive Programs—New and Existing Companies

The City of Birmingham Office of Economic Development (OED) provides a wide variety of federal, state and locally-sponsored programs and activities, including financial assistance, employment and training, business assistance and retention programs, and site specific targeted economic development initiatives.

Local programs

The Birmingham Business Resource Center (BBRC) is a one-stop center for small business finance and related technical assistance. BBRC is sponsored by the City of Birmingham and area banks. It brings together in one location a number of small business loan programs previously offered by the Office of Economic Development and area banks.

State programs

Alabama boasts a progressive state business environment as demonstrated by its comprehensive right-to-work laws, one-stop environmental permitting, and a positive state and local government attitude toward new and expanding business. Tax rates are competitive; for example, employers who provide or sponsor an approved basic skills education program qualify to receive a 20 percent credit on state corporate income tax liability. The Alabama Enterprise Zone Program helps attract new business to Alabama with tax breaks to those operating in the designated 10,000-acre industrial area. Information about these incentives is available through the Alabama Development Office.

Job training programs

In April 2001 Jefferson State Community College unveiled its new manufacturing center, where students learn vocational skills including industrial maintenance, automation, computer aided drafting and drawing, machining and telecommunications. The manufacturing program's goal is to train workers who can be productive as soon as they are hired. Rather than instruct students by theory, the school asked area manufacturers to detail their needs. Top business executives in Alabama applaud the state's Industrial Development Training Program, which does everything from advertising, to processing job applications, to training and delivering employees.

Development Projects

After considerable renovations in 2000, the upgraded Birmingham-Jefferson Civic Center opened as the newly named Birmingham-Jefferson Convention Complex. The upgraded complex hosts a variety of events in its many venues, which include the ample exhibition hall and meeting rooms, a 19,000 seat sports and performance arena, a theater and an adjoining hotel. Developers and city agencies are looking toward major revitalization efforts in downtown Birmingham. The city's skyline changed when work was completed in 2002 on the $27 million, 11-story Concord Center office building, the first new multi-tenant office building downtown in 11 years. Operation New Birmingham (ONB), a non-profit organization, is supported by the City of Birmingham and by contributions from businesses, individuals and Jefferson county, works with developers to revitalize the downtown business district. Among ONB's projects are renovations, completed in 2004, of several downtown buildings into retail and loft space. In 2005, plans include a $34 million new construction that will house the Birmingham District of the Federal Bureau of Investigations. The Park Place/Metropolitan Gardens Redevelopment will replace a deteriorating low-income housing project with 663 mixed-housing units in a six-block community. The city's largest planned downtown residential project, the Railroad Reservation Lofts, is a $22 million, nine-story structure that is slated for completion in 2007. The planned project will offer commercial space, apartments and condominiums.

In private developments, so many auto-related companies have located in greater Birmingham that residents call the area "little Detroit." A half hour southwest of Birmingham, in the tiny town of Vance in Tuscaloosa County, a new road called Mercedes Drive leads to the first Mercedes-Benz (a division of Daimler-Chrysler) auto plant ever built in North America. The Mercedes-Benz Vance plant, built in 1993, is also the first Mercedes-Benz passenger-car assembly plant outside Germany. Alabama offered $80 million in incentives to entice Mercedes-Benz to set up shop in the state; by 2000 Mercedes had invested $380 million in Alabama. In 2001 Mercedes-Benz began construction on a $600 million expansion that is estimated to double production, with an expected completion date of 2005. State investments in auto production have led several auto service production plants to open shop in other areas of the state, namely Hyundai in Montgomery and Honda in Lincoln.

In other private developments, one of downtown Birmingham's largest and most conspicuous vacant building received a $30 million face-lift from Bayer Properties, which finished conversion in 2003 of the eight-story 1908 Pizitz department store building to Class A office space with a ground-floor retail component. In 2002, American Cast Iron Pipe Co. (ACIPCO) prepared for stricter pollution regulations with an $80 million expansion at its North Birmingham plant. The company added 61,000 square feet of space to add a state-of-the-art, electrically-fired furnace.

There is also plenty of activity going on at the University of Alabama at Birmingham (UAB). In 1998, Alabama health officials endorsed a 5-year, $578 million expansion of UAB's University Hospital complex. In late 2004, the new 885,000 square foot, 11-story hospital opened with 37 operating suites, 4 intensive care units, 96 private patient rooms and an emergency unit the size of a football field. In April 2002, UAB broke ground on a new 300,000-square-foot, 12-story Shelby Interdisciplinary Biomedical Research Building, which will house four distinct research programs. Due to be completed in 2005, the new facility is expected to generate $100 million in annual grants and employ 1,400 people. Oxmoor Valley research park was created by a partnership of UAB and the city of Birmingham, and houses the university's Office for the Advancement of Developing Industries Technology Center (OADI). Since UAB became an autonomous campus, it has spent about $800 million on new construction and has built about 100 buildings in an 82-block area.

Economic Development Information: City of Birmingham Office of Economic Development, 710 20th Street North, Birmingham, AL 35203; telephone (205)254-2799; fax (205)254-7741; email cmsmith@earthlink.net. BBRC, 110 12th Street North, Birmingham, AL 35203; telephone (205)250-6380; fax (205)250-6384; email info@bbrc.biz. Alabama Development Office, Neal Wade, Director, 401 Adams Avenue, Suite 670, Montgomery, AL 36130-4106; telephone (800)248-0033; email idinfo@www.ado.state.al.us. Alabama Department Of Industrial Relations, Phyllis Kennedy, Director, 649 Monroe Street, Montgomery, AL 36131; telephone (334)242-8859; fax (334)242-2543; email LMI@dir.state.al.us. Operation New Birmingham, 505 20th Street North, Suite 150, Birmingham, AL, 35203; telephone (205)324-8797; fax (205)324-8799.

Commercial Shipping

Born at the junction of two railroads, and always an important transportation center, Birmingham today is served by an outstanding network of highways, extensive rail track, aircargo facilities, and nearby navigable waterways. The CSX and Burlington Northern Santa Fe railroad systems haul freight to and from the metropolitan area, where a multimodal system is located. More than 100 truck lines, many with nationwide service, and five air-cargo firms move goods and products for Birmingham companies. Birmingham's Airport Industrial Park is designated as a Foreign Trade Zone, a major asset in attracting additional business to the area. General commodities are transported economically on barges along the nearby Warrior-Tombigbee River System and the Tennessee-Tombigbee Waterway to other inland cities and through the Port of Mobile to foreign countries.

Labor Force and Employment Outlook

Birmingham's transformed economy is now less dependent on cyclical manufacturing and mining sectors and more on health and financial services. Birmingham is the state's center for advanced technology and there are more engineers per capita living in the local area than in any other southeastern city.

Birmingham, like other Alabama cities, enjoys a good reputation in Asia. Local analysts predict that the region will continue to be a magnet for overseas capital.

The following is a summary of data regarding the Birmingham metropolitan area labor force, 2003 annual averages.

Size of nonagricultural labor force: 474,500

Number of workers employed in . . .

construction and mining: 32,300

manufacturing: 40,400

trade, transportation and utilities: 102,200

information: 13,700

financial activities: 39,100

professional and business services: 59,700

educational and health services: 54,400

leisure and hospitality: 37,200

other services: 23,100

government: 72,000

Average hourly earnings of production workers employed in manufacturing: $14.56

Unemployment rate: 4.6% (October 2004)

Largest county employers	Number of employees
University of Alabama at Birmingham	16,271
U.S. Government	9,690
BellSouth	7,500
State of Alabama	6,784
Baptist Health Systems	6,000
Bruno's Incorporated	5,374
Jefferson County Board of Education	5,000
Birmingham Public Schools	4,555

City of Birmingham	4,500
Walmart	4,320
Jefferson County Government	4,191

Cost of Living

Birmingham's cost of living, as well as its housing prices, are slightly below the national average.

The following is a summary of data regarding several key cost of living factors for the Birmingham area.

2004 (3rd Quarter) ACCRA Cost of Living Index: not reported (U.S. average = 100.0)

2004 (3rd Quarter) ACCRA Average House Price: not reported

State income tax rate: Ranges from 2.0% to 5.0%

State sales tax rate: 4.0%

Local income tax rate: 1.00% (occupational)

Local sales tax rate: 6.0 to 9.0%

Property tax rate: $18.70 per $1,000 assessed value (2004)

Economic Information: Metropolitan Development Board, 2027 First Avenue North, Suite 1300, Birmingham, AL 35203; telephone (205)328-3047; fax (205)328-3073. Office of Economic Development, City of Birmingham, 710 North 20th Street, Birmingham, AL 35203; telephone (205)254-2799. State of Alabama, Department of Industrial Relations, 649 Monroe Street, Montgomery, AL 36131