Forecast: Atlanta to add jobs in 2011, but dangers lurk

By Dan Chapman

The Atlanta Journal-Constitution

Three years of deep job losses should end in 2011 with the creation of 42,500 new jobs in Atlanta, according to an economic forecast Wednesday by Georgia State University.

But the region’s recovery contains too many hard-to-gauge variables – the European debt crisis, the Gulf oil spill, consumer confidence, China’s continued purchase of U.S. treasuries – for GSU economist Rajeev Dhawan to promise that the recession’s end will translate into robust employment.

“I’m optimistic, but I’ve downgraded my predictions because there are too many fragile things going on around the world,” Dhawan, director of the school’s Economic Forecasting Center, told a couple of hundred businessmen, government employees and students gathered at the school's student center.

Each quarter, Dhawan and his team attempt to divine the economic future for Atlanta, Georgia and the United States. A flurry of recent global “hiccups,” in Dhawan’s words, layered on top of a herky-jerky economic recovery, complicated this spring’s prognostications.

Dhawan, for example, labeled the volcanic ash from Iceland that impacts European air travel a “two-alarm fire” that could harm the profits of Atlanta-based Delta Air Lines, a major metro employer, and other carriers.

The BP oil spill rated three alarms, but the damage – as much as $20 billion this quarter to the economies of Louisiana, Mississippi, Alabama and Florida – shouldn’t unduly affect Georgia. If the spill isn’t capped, and the damage spreads beyond the tourism and fishing industries, Georgia’s banks and interstate commerce could suffer.

The Greek debt crisis, and its potential to wash over Europe and, possibly, the United States, could become a five-alarm fire, Dhawan said. A weaker Euro translates into a stronger dollar and would hinder Georgia's burgeoning exports.

“Six to nine months down the road, exports won’t be as good,” Dhawan said. “This is not a trivial thing.”

Yet the economist expects Georgia exports to rebound by 2011 – just as Georgia companies begin hiring again. Until then, though, the Atlanta region will lose another 12,500 jobs, on top of the 129,000 lost last year.

Next year, the area should gain 42,500 jobs and another 51,600 jobs in 2012. Both numbers are down several thousand from the previous forecast.

Unemployment, at 10.4 percent in March for metro Atlanta, should rise slightly this year before falling back to 9.7 percent in 2012, Dhawan said.

Dhawan’s tepid jobs prediction was echoed by conference participants Steve Palm, president of SmartNumbers, a real estate data company in Marietta, and Chris Shaner, research director for the real estate services firm Cushman & Wakefield's office in Atlanta.

Atlanta’s retail and office markets won’t rebound until companies begin hiring, Shaner said, adding that the industrial sector looks more promising.

“The only positive trend I can say about 2009 is that it’s over,” Shaner said. “It’s 2010 now (and) there’s a lot of cash on the sidelines. Investors are poised to get back out there.”