Georgia’s economy is humming along with decent hiring, home-building and consumer spending expected to last through 2015, two economists predicted Wednesday.
Rajeev Dhawan, an economic forecaster at Georgia State University, expects nearly 100,000 new jobs statewide this year. He also projects statewide economic growth of 3.2 percent, up from 2.3 percent from last year.
Mark Vitner, a Wells Fargo managing director, said good-paying jobs in health care technology, payment processing and other fields will continue to grow, particularly across metro Atlanta.
“Georgia’s economy is doing better today than at any time since the Great Recession,” Vitner said during a breakfast presentation at the downtown Commerce Club. “It’s the strongest I’ve seen the state’s economy and Atlanta’s economy since the 1990s. I’m feeling pretty optimistic.”
But he also predicts a bit of “frothiness” in the economy, perhaps later this year. Housing inventory is too low, and prices too high, Vitner said. He also expects the Fed to raise interest rates by year’s end which could dampen the economic recovery.
Georgia’s unemployment rate, 6.3 percent in March, is down in recent months but still nearly a point higher than the national rate. Georgia, which last year had the nation’s highest rate at one point, now is tied with Rhode Island at No. 39.
Georgia added 145,000 jobs in 2014, according to recently revised federal figures, which was up sharply from 91,200 in 2013 and 66,300 in 2012. It’s unclear what caused last year’s statistical surge, but Dhawan said this year’s expected total should be a healthier mix. Job growth is forecast to level out in the mid-90,000s in 2016 and 2017.
“It’s the quality of the jobs that is important,” Dhawan said during his quarterly forecasting conference at Georgia State. “Those 145,000 jobs … aren’t giving the economy nearly as big of a bang for its buck as it did back in the 1990s when slightly fewer jobs, but with greater purchasing power, were created.”
Some of Georgia’s job and GDP gains comes at the expense of West Coast industries. A months-long labor dispute at ports in Los Angeles, Long Beach and beyond helped boost container traffic through the port of Savannah by 26 percent in March compared to a year earlier. Port executives expect another record-breaking year in 2015.
The searing California drought targets the Central Valley’s fruit and vegetable farms and boosts prospects for Southwest Georgia’s pecan, tomato, pepper, cabbage and cantaloupe crops. And the nasty pine beetle infestation that wiped out 60 percent of British Columbia’s timber crop the last decade continues to spark demand for Georgia pine logs and sawmills.
The housing rebound resurrected northwest Georgia’s once-moribund economy — Dalton held the nation’s highest unemployment rate at one point during the recession — as carpet and textile factories roared back into production. Augusta is adding thousands of military and civilian cyber-security jobs.
Metro Atlanta will account for the lion’s share of jobs: about 75,300 new positions, with expansion expected in corporate, retail and tourism, according to Dhawan’s forecast.
“Stronger job growth is driving incomes higher and fueling home sales and consumer spending,” Vitner said. “A slew of corporate relocations has helped the state get its familiar swagger back that seems to have been missing ever since the housing market tanked eight years ago.”
The loss last week of a Volvo factory to South Carolina tempered only slightly Vitner’s outlook for Georgia’s economy.
Job growth hasn’t yet translated into markedly higher wages. Most of the new jobs in 2014 weren’t “quality,” or good-paying jobs, Dhawan said. The number of decent-paying construction jobs, for example, remains 27 percent below pre-recession levels, Vitner said.
Dhawan studies tax receipts to get a better handle on paycheck size. During the 1990s, state tax receipts grew at a 7.1 percent-a-year pace. Last year, tax receipts were up only 5.5 percent.
“Average purchasing power for people has been basically holding steady, but there doesn’t seem to be the push it needs to improve,” Dhawan said.
Vitner also sees improvement in the quality of jobs and what they pay. Employment in the state’s professional and business services realm — management, technical and administrative jobs — grew nearly 6 percent the last year. Only construction and leisure added more.
“The economy will gain, instead of lose, momentum for the next 18 months,” Vitner said.
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