Birmingham has earned an overall grade of A- with a composite score ranking it at the 61.0th percentile among 50 US metros. The city's economic character is most defined by its strong labor demand, with a composite score in the top tier at the 84th percentile, and its low unemployment rate of 2.70%, ranking it in the top tier at the 94th percentile. These metrics signal a city with a thriving job market and intense competition for labor.

Labor Demand

Birmingham's employment growth rate is +0.67% year-over-year, and its weekly hours deviation from trend is +0.728%, indicating genuine demand expansion. This combination signals that the city is experiencing a period of job growth, with hours worked above trend, suggesting that businesses are actively seeking to hire and expand their operations. The labor demand composite score of 5.97 further reinforces this notion, placing the city in the top tier at the 84th percentile.

Unemployment

The unemployment rate in Birmingham is 2.70%, which is extremely low and ranks in the top tier at the 94th percentile. This tight labor market implies that businesses may face significant competition for workers, potentially driving up wages and making it more challenging to hire. As a result, companies looking to establish or expand operations in Birmingham may need to offer competitive salaries and benefits to attract top talent.

Wage Growth

The year-over-year wage growth rate in Birmingham is -0.91%, which is stagnant and ranks in the bottom tier at the 2nd percentile. This slow wage growth suggests that labor costs for employers may be relatively flat, but it also implies that workers may have limited bargaining power and purchasing power. As a result, businesses may not face significant pressure to increase wages, but they may also need to consider other benefits and incentives to attract and retain workers.

Cost of Living

Birmingham has a cost of living score that ranks in the 29th percentile, with a price-to-salary ratio of $161/sqft to $32.82/hr, or 4.91. This suggests that the city is relatively expensive compared to its peers, which could make it challenging to attract talent without offering wage premiums. However, the fact that the PSF is only rising by 0.6% year-over-year may help to mitigate some of these costs.

Labor Force Growth

The civilian labor force in Birmingham is growing at a rate of +0.35% year-over-year, which ranks in the 62nd percentile. This moderate growth rate suggests that the workforce supply is expanding, albeit slowly, which could help to support hiring efforts by businesses. However, the relatively slow growth rate may also limit the pool of available workers, making it essential for companies to offer competitive compensation and benefits.

Building Permits

The number of residential building permits in Birmingham is increasing by +18.48% year-over-year, which ranks in the 74th percentile. This significant growth in permits suggests that housing supply is expanding, which could help to improve affordability and accommodate a growing workforce. As a result, businesses may find it easier to attract and retain workers, as the availability of housing options increases.

Days on Market

The median days on market for homes in Birmingham is 52 days, with a year-over-year increase of +4.0%, ranking in the 40th percentile. This relatively moderate days on market suggests that the housing market is neither extremely competitive nor extremely slow, making it accessible for workers relocating to the city. However, the rising days on market may indicate a slight normalization of the market, which could help to prevent overheating.

Office Economy

Birmingham's office economy is ranked in the 62nd percentile, with a share of professional and office workers at 3.04. This suggests that the city has a moderately deep talent pool in these sectors, making it suitable for businesses in tech, finance, consulting, and HQ operations. However, the city may be less suited for industries that require a large workforce in industrial or logistics roles.

In conclusion, Birmingham offers a business a thriving job market with strong labor demand and a highly competitive workforce. However, the city's low unemployment rate and slow wage growth also present challenges for businesses looking to hire and retain top talent. The single biggest risk or constraint for decision-makers is the potential for intense competition for labor, which could drive up wages and make it challenging to attract and retain workers.