Georgia recovering, but slowly

By Thomas Oliver

The Atlanta Journal-Constitution

Good economic news keeps trickling in.

We seem to have avoided the dreaded double-dip recession, though how quickly we’ll recover is still uncertain.

Jeffrey M. Humphreys, Terry College of Business professor at UGA, early on predicted the length and severity of the recession, as well as saying it would be a jobless recovery.

So, we should pay attention now that he's making speeches around the state about a recovery.

Despite persistent problems, such as tight credit and anemic job growth, Humphreys says Georgia’s recovery will be sustained. No fear of a double dip.

However, because our economy was so dependent on real estate – housing and commercial – Georgia’s recovery will be slower than the rest of the nation's.

Georgia will lag the national recovery because it had an “outsized construction industry, a huge supply bubble of residential and nonresidential properties, and a swollen pipeline of properties at various stages of development,” Humphreys says.

Plus, we had huge concentration of businesses closely related to real estate, such as building materials and supplies.

And, of course, we had banks underwriting all that.

“The financial crisis did much more damage to Georgia’s banks than to the nation’s financial sector,” Humphreys says.

We also lost more jobs on a percentage basis than the country did -- 8.3 percent vs. 6.1 percent.

Humphreys characterizes the employment situation as a lost decade for the state, because “at the dawn of the millennium, Georgia had 3.9 million jobs. A decade later we have 3.8 million jobs.”

The recovery in jobs will also be slow. Slower than the pace of those entering the workforce, so that the unemployment rate will rise to 11 percent in the next few months.

But our economy will catch up with the nation’s recovery sometime the middle of next year.

In the meantime, if you are looking for a job right now, Humphreys says check out temp agencies or jobs in healthcare, the defense industry or with the federal government.

Within a couple of months, there should be jobs opening in transportation, education, retail, and the hospitality industry. By late 2010, “the financial sector will be on the upswing.”

While consumer spending will take a while to recover, “business spending will increase sharply,” Humphreys says. Especially for transportation equipment, computers, software and communications equipment.

More good news:

“The recession has done nothing to reduce Georgia’s attractiveness as a cost effective place to do business…[and] Atlanta is the least costly, large U.S. metropolitan area in which to do business,” the professor notes.

And saving the best for last:

Our long housing nightmare has run its course.

“For the first time since 2005, the housing market will push Georgia’s economy forward rather than backward,” Humphreys predicts.

Prices have stabilized, if at a depressed levels, which Humphreys says could have two positive effects:

The low prices will entice buyers, now that they know the prices won’t go lower after they buy. And, "home price appreciation could be significant once the inventory of unsold homes normalizes.”

That’s what we’ve been waiting to hear for what seems like forever.

Editor’s note: This is Thomas Oliver's final column. As he closes a 33-year journalism career, Oliver plans to devote time to teaching his highly regarded writing class to businesses. And performing his country music songs in his new hometown of Tybee Island.