Buying local could be worth more than $21 billion a year to the Mobile-area economy, according to a University of South Alabama economist who recently laid out the region’s “importing” problem to the Mobile Area Chamber of Commerce.
Dr. Donald Epley, director of USA’s Center for Real Estate and Economic Development, presented data-driven projections built from the Mobile Business Activity Index, local employment and payroll figures, and consumer spending on home purchases. His analysis showed the index was projected to rise about 2 percent over the following 12 months, pointing to a more productive year than 2014.
But the most striking figure concerned how much of what the region produces depends on supplies brought in from elsewhere. Epley said roughly 63 percent of the output of the area’s 20 largest industries came from imports sourced outside the Mobile Metropolitan Statistical Area, the equivalent of more than $21 billion leaving the region each year.
In a follow-up conversation, Epley said the key to closing that gap is getting the region’s largest job-generating industries to understand the scale of the leakage. Because buying local depends only on local decisions, he argued, the area does not need to wait on help from Washington or Montgomery to stimulate its economy.
Epley outlined three levers for increasing economic activity: add jobs, raise wages, or do both. When existing firms see profits improve, they gain the ability to hire or pay more, he said, and reducing imports asks local companies to supply more of what their neighbors already buy. He proposed that the Chamber convene the 20 major industries to review their own purchasing and identify what could be sourced closer to home.
He also noted that many of those purchases are subject to local sales tax, a major source of government revenue, meaning a shift toward local sourcing could ripple through public budgets as well as private balance sheets.