Georgia economy could be slower to recover

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 here.)

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)

• Overall: Down 6 percent in past year; down 7.2 percent since Dec. 2007; 300,000 jobs lost

• Construction: Down 19.2 percent in past year; down 25.2 percent dince Dec. 2007; 54,700 jobs lost

• Manufacturing: Down 13.7 percent in past year; down 17.5 percent since Dec. 2007; 74,500 jobs lost

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

• 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

In fiscal year ended July 1

State coffers

• Overall state revenues: Down 10.5 percent

• Personal tax receipts: Down 12.2 percent

• Corporate tax receipts: Down 26.3 percent

In fiscal year ended July 1

Now the good news ...

Relocations and new business highlights

• Mohawk Industries 400 jobs added in September 2009

• NCR Corp. 2,120 jobs added in December 2009

• Kellogg's 300 jobs added in December 2009

• Mitsubishi Power Systems 500 jobs added in March 2010

• Corrections Corp. of America 300 jobs added in September 2010

• Kia Motors 1,200 jobs added in December 2010

• First Data Corp. 1,000 jobs added in 2012

• College Football Hall of Fame 100 jobs added in September 2012

• Cancer Treatment Centers 500 jobs added in 2014

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