Housing industry hurts rebound

By Tammy Joyner

The Atlanta Journal-Constitution

The industries that helped metro Atlanta and the rest of Georgia enjoy tremendous growth are now weighing down the state’s recovery, a new economic study suggests.

Home building put metro Atlanta on the map for most of the last decade. Between 1998 and 2005, the region was the No. 1 housing market in the country. That led to staggering growth. Housing was the sun and all other industries — carpet, retail, shipping — orbited around it.

Then the recession eclipsed everything. The collapse of the housing market hit especially hard here. Real gross state production — a measure of goods and services produced in Georgia — fell 0.6 percent, the second worst drop in the Southeast last year. Florida was the worst at 1.6 percent.

Banking giant Wells Fargo recently crunched the numbers on Georgia’s economic performance going back a year or two before the start of the recession in December 2007 and drew this conclusion:

“We expect Georgia’s economy to emerge somewhat more slowly from the recession than the nation,” senior economist Mark Vitner and economic analyst Yasmine Kamaruddin noted in their 20-page report. “The state’s heavy dependence on manufacturing and construction, especially as it relates to residential and commercial construction, will weigh on the state’s economic performance for at least the next 18 months.”

The Georgia forecast echoes the consensus view of the National Association for Business Economics released last week. While more than 80 percent of NABE economists surveyed said they believe the recession is over and an expansion has begun, they expect the recovery across the country will be slow as worries over unemployment and high federal debt persist.

Here are some of the highlights — or lowlights — from Wells Fargo’s new look at the Georgia economy. (The full report is available at wachovia.com/economics.)

Housing

Metro Atlanta home prices in the last year: down 11.8 percent

Metro Atlanta home prices since July 2007: down 19.4 percent

Single-family home permits in Georgia: 
down 24.9 percent in the last year; down 85 percent from 2005

Multi-family construction permits in Georgia: 
down 45 percent in the last year; down 87 percent from 2004.

Georgia foreclosure rate through the first half of this year: 
6th highest in the nation

Jobs (nonfarm employment)

Past year Since Dec. 2007 Jobs lost

Overall down 6 percent down 7.2 percent 300,000

Construction down 19.2 percent down 25.2 percent 54,700

Manufacturing down 13.7 percent down 17.5 percent 74,500

Wages

(private wages and salaries)

Down 2.8 percent in the past year

Banks

Number of failed regional and community banks in Georgia: 
24 (since August 2008)

Georgia ports

In fiscal year ended July 1:

Number of 20-foot Equivalent Unit (TEU) containers handled: 
2.4 million, down 10.5 percent

Total tonnage: 22.6 million, down 12.4 percent

State coffers

In fiscal year ended July 1:

Overall state revenues: down 10.5 percent

Personal tax receipts: down 12.2 percent

Corporate tax receipts: down 26.3 percent

Now the good news ...

Relocations and new business highlights

Company Jobs added When

Mohawk Industries 400 September 2009

NCR Corp. 2,120 December 2009

Kellogg’s 300 December 2009

Mitsubishi Power Systems 500 March 2010

Corrections Corp. of America 300 September 2010

Kia Motors 1,200 December 2010

First Data Corp. 1,000 2012

College Football Hall of Fame 100 September 2012

Cancer Treatment Centers 500 2014

Source: “Georgia Economic Outlook: October 2009,” Wells Fargo Securities, LLC