The population of the 4-county Birmingham metropolitan area was 921,100 as of the 2000 census, an increase of approximately 81,000, or 9.6 percent, for the decade. The city of Birmingham is located in Jefferson County, which reported a population increase of less than 2 percent during the decade. Suburban Shelby County accounted for more than half of the population gains in the area, adding approximately 44,000 people during the decade.

Nonagricultural employment in the metropolitan area increased at an average annual rate of 1.9 percent between 1990 and 2000. However, the nationwide recession has affected the Birmingham area. After peaking at 486,400 jobs in June 2001, nonagricultural employment fell slowly but consistently to 484,700 by the end of February 2002. The decline is attributable to the loss of 2,100 jobs in the manufacturing sector over the past 12 months, primarily in the metals industry. With the firming of steel prices in early 2002, local sources predict that the worst of the layoffs are over, and hiring is expected to improve in the second quarter of 2002. The nonmanufacturing sector has performed somewhat better over the past 12 months, led by gains in services, 1,800 jobs; finance, insurance, and real estate, 1,000 jobs; and State and local government, 1,000 jobs. The unemployment rate in the Birmingham metropolitan area was 3.4 percent in February, considerably lower than the statewide rate of 5.4 percent.

Birmingham’s weakened economy in the past 9 months has affected the housing industry. Building permits were issued for 4,370 units in the metropolitan area in 2001, the lowest number since the bottom of the last recession in 1992. Of that total, 4,070 were for single-family homes. Data for the first 3 months of 2002 indicate that the industry may be at the beginning of a recovery. Single-family permits totaled 1,157 through March 2002, an 18.7-percent increase over the same period in 2001. Fueled by the growth in Shelby County, the area’s homeownership rate increased from 68.1 percent in 1990 to 70.8 percent in 2000 and again to a record 74.3 percent as of the fourth quarter of 2001.

The number of multifamily units authorized by building permits changed very little in the metropolitan area from the 1980s to the 1990s, totaling 10,370 and 10,450 for the 2 decades, respectively. After peaking at 1,285 in 1998, permits for multifamily units declined steadily to only 305 in 2001, the lowest number in nearly 20 years. As the multifamily units permitted during 1998 were completed and entered the market, vacancies in apartment units increased from 6.3 percent in mid-1999 to 7.1 percent by the end of 2000. By the end of 2001, the last date for which data are available, the decline in the number of new apartments pulled the vacancy rate back down to 6.5 percent. Rents were relatively flat during 2001, increasing 1.9 percent to an average of $587. Multifamily activity is expected to increase in 2002 as weakness in the manufacturing sector eases and 3 years of below-normal production combine to create demand for more apartments. However, there is no evidence that the recovery in the apartment market has begun. Only 20 multifamily units were permitted in the first 3 months of 2002, unchanged from the first 3 months of 2001.

In an effort to further reduce the area’s dependency on primary metal manufacturing, the mayor and the Chamber of Commerce created the Birmingham Area Technology Task Force (BATT Force) in July 2001. The BATT Force is charged with developing a plan to coordinate and support the attraction, startup, growth, retention, and expansion of technologybased businesses. Studies show that entry-level technology jobs pay wages considerably higher than average, and each new technology job generates 3.55 additional jobs compared with an average of 2.86 jobs for all industries. The BATT Force believes that Birmingham is well positioned to compete in the information technology arena because of the presence of the University of Alabama at Birmingham and other outstanding research institutions and facilities, a strong financial community that is second only to Charlotte in the Southeast Region as a banking headquarters, and other competitive advantages such as the availability of land and relatively low cost of living. The plan was presented to the Birmingham’s mayor and the city council in February 2002.