Buckle Your Economic Seatbelt, State is in for Rocky 2008

Surprise, surprise. Things will be less than rosy for Alabama’s economy over the next 12 months or so, according to Ahmad Ijaz, economic analyst at the Center for Business and Economic Research at The University of Alabama.

Ijaz says the Alabama economy will grow by 2 to 2.3 percent next year, only slightly better than the national economy.

“High energy prices, increasing interest rates, the falling dollar, a downturn in the housing market, and tighter lending conditions for both consumers and business are expected to have a significant impact on the U.S. economy in 2008,” Ijaz says.

Look for consumers to cut back on spending next year, especially on durable goods such as appliances, electronic products and furniture, as well as residential investment. New home building will fall about 26 percent, and single family home sales will drop about 15 percent.

Ijaz predicts things might be a little brighter in the business world, where business spending will nudge up slightly to about 4 percent.

And yes, the inflation rate, as measured by the consumer price index, will go up, to the tune of about 2.5 percent.