Government at the local, state, and federal levels plays a major role in Montgomery's economy. It makes up one-fourth of the work force and lends a strong stability to the local economy. The local colleges and universities make an important contribution to the economy, as does the major military presence of Maxwell Gunter Air Force Base. The relatively new addition of automotive companies to central Alabama has created new opportunities for workers and suppliers.
Montgomery's location in the center of a zone of rich black soil that stretches across Alabama makes it an important processing and shipping center for cotton, dairy, and other farm products. The city also boasts a large livestock market. The city's role as a regional trade center is firmly established, and it serves as a wholesaling and distribution gateway to the entire southeast.
Among the variety of Montgomery's industries are metal fabrication, food processing, lumber processing, and furniture production. Sand, gravel, grain, and chemicals are transported north and south via barge from the Montgomery region.
More than 135 information technology (IT) companies were based in Montgomery in 2005. The IT industry in Montgomery has an estimated $1 billion per year economic impact and accounts for approximately 14,000 workers in private, federal and state sectors. In addition, the tourism industry, which annually pours more than $350 million into the local economy, employed more than 11,000 people.
Items and goods produced: food, lumber, furniture, metal products, textiles, brick, glass, printing/publishing, plastics, software engineering products
The Montgomery Area Center for Entrepreneurial Development provides help to small businesses with everything from startup and counseling to non-conventional financing, training, recognition, and networking. An offshoot of the Montgomery Area Chamber of Commerce, the center also provides affordable space at below-market rates for startup entrepreneurs. Manufacturing/distribution projects may receive exemptions for up to 10 years from ad valorem taxes other than those levied for educational purposes.
The City of Montgomery is an Urban Enterprise Zone, which results in state tax and nontax incentives that are some of the best in the United States. Montgomery has been designated as a general purpose foreign trade zone, which provides payment deferrals or cancellation for businesses in the zone. New or expanding businesses may also qualify for grants of money for carrying out site improvements.
Alabama offers a full gamut of financial incentives aimed at promoting economic growth. These include payroll tax breaks, industrial revenue bonds for land, building, and equipment for new and expanding plants. The Alabama Economic Development Loan Program can be used to purchase land, buildings, machinery, and equipment. There are also three revolving loan funds. Business loan guarantees are available to firms that create or retain permanent jobs. The Capital Investment Tax Credit program is available to new and expanding businesses involved in manufacturing, warehousing, research, and computer services. Other innovative programs include the State Industrial Site Preparation Grant Program and the Public Works and Development Facilities Grant Program.
The Alabama Industrial Development Training (AIDT) program provides a total delivery system for screening and selecting trainees and for designing and implementing training for any new or expanding manufacturer in the state of Alabama. The program provides a full range of customized technical training programs that are free to employers and trainees. Thirty-six mobile training units go directly to the employer site to provide classroom and hands-on training. The program's AIDT project supports the development and enhancement of the city's professional Information Technology community as well as its aerospace, chemical industry, and other area manufacturers. The Workforce Investment Act helps defer the costs of hiring and training new employees for private businesses.
In 2005, plans were underway for a major overhauling of the Montgomery Riverfront district. The City of Montgomery, the Montgomery Riverfront Development Foundation, and the Montgomery Area Chamber of Commerce had formed an alliance and were working together towards this end. The riverfront plan consists of a $29 million upgrade of the current civic center and a new $53 million hotel in the heart of the district. Those efforts will join the new amphitheatre, stadium, and riverwalk, and combine with an already thriving entertainment district. In addition, the city's revitalization efforts will include a new intermodal transportation center at Union Center. The center, funded in part by federal money to the tune of $8.1 million, will serve as a hub for the transportation system and the downtown trolley system.
In 2004 construction of four new shopping centers began under the development of Aronov Realty Management. Each new center is to be anchored by a Publix grocery store. The four centers will offer 500,000 square feet of retail and business space. In 2004 the Headquarters Standards Systems Group (SSG) broke ground at Maxwell Airforce Base, Gunter Annex. SSG's new $12.6 million 51,450-square-foot Integrated Operational Support Facility is expected to be completed in 2006.
Also in 2004 plastics manufacturer Webster Industries expanded, opening a second operating facility and adding 300 new jobs. Production at Hyundai Motor Manufacturing Alabama is expected to begin in spring 2005. Hyundai's Montgomery plant will occupy 1,720 acres and pump out an estimated 300,000 vehicles and engines, as well as bring 2,000 jobs to the state.
Economic Development Information: Montgomery Community Development Department, PO Box 1111, Montgomery AL 36101; telephone (334)241-2996. Montgomery Area Chamber of Commerce, 41 Commerce Street, PO Box 79, Montgomery, AL 36101; telephone (334)834-5200
Montgomery is served by 48 motor freight carriers. The Norfolk Southern Company and CSX railroads provide transport opportunities for many local industries. The Alabama River provides a nine-foot channel for barges to cross into the Gulf of Mexico through the port of Mobile. Alabama State Docks in Mobile, accessible via waterway from Montgomery, offer 1000-ton capacity facilities inside a protected barge-turning basin. Barge transportation to the Great Lakes is available through the Tennessee-Tombigbee Waterway.
In 2000 a corporate research group that specializes in the study of job creation named Montgomery as one of the nation's top 25 small metropolitan area "hot spots" for entrepreneurial growth. Montgomery's job growth today relies on the city's burgeoning tourism industry as well as its resident air force base, universities, and information technology industry.
The following is a summary of data regarding the Montgomery metropolitan area labor force, 2003 annual averages.
Size of nonagricultural labor force: 163,300
Number of workers employed in . . .
construction and mining: 8,500
trade, transportation and utilities: 30,400
financial activities: 10,400
professional and business services: 17,200
educational and health services: 17,800
leisure and hospitality: 13,600
other services: 8,200
Average hourly earnings of production workers employed in manufacturing: $13.56 (statewide)
Unemployment rate: 5.1% (November 2004)
|Largest employers||Number of employees|
|Maxwell-Gunter Air Force Base||12,700|
|State of Alabama||9,500|
|Montgomery Public Schools||3,700|
|ALFA Insurance Companies||2,568|
|City of Montgomery||2,500|
|Jackson Hospital & Clinic||1,300|
|Rheem Manufacturing Co.||1,150|
The following is a summary of data regarding several key cost of living factors for the Montgomery area.
2004 (3rd Quarter) ACCRA Average House Price: $241,263
2004 (3rd Quarter) ACCRA Cost of Living Index: 94.3 (U.S. Average = 100.0)
State income tax rate: 2.0 to 5.0%
State sales tax rate: 4.0%
Local income tax rate: None
Local sales tax rate: 3.5% city, 2.5% county
Property tax rate: $3.45 per $100 of assessed value
Economic Information: Montgomery Area Chamber of Commerce, 41 Commerce Street, PO Box 79, Montgomery, AL 36101; telephone (334)834-5200