Employers are hiring, homes are selling, and incomes are rising, all of which means Atlanta should continue a slow climb from its deep recessionary hole in 2013 and beyond, a panel of economists and housing experts said Wednesday.
Even budgetary threats from Washington and softening markets overseas shouldn’t unduly harm Georgia’s still-fragile economy, Rajeev Dhawan, director of the school’s Economic Forecasting Center, said during Georgia State University’s quarterly forecasting conference. He admonished the 200 or so businessmen, students and professors in attendance to not get swept up in the ceaseless drumbeat of economic gloom and fiscal doom.
The economy “is waiting to break out, but it faces strong head winds,” Dhawan said. “Things will be fine. Keep your nerve. And keep breathing.”
The professor’s optimism, though, was tempered by Richard Yamarone’s suggestion that the national economy may yet return to the recessionary abyss. Yamarone, an economist with Bloomberg, noted that the country is indeed adding jobs, but they’re mostly low-paying retail and hospitality jobs.
And many of the jobs aren’t full-time, an employment tactic that keeps corporations from offering health care and other benefits. Also, fewer Americans were added to payrolls last year than the food stamp program, Yamarone added.
“I can bring you over to the dark side of the economy where I reside,” he said. “We’re prone to a recession. It would not take much.”
Georgia, hit harder than most of the country by the recession and with an 8.6 percent unemployment rate nearly a point higher than the national average, nonetheless show signs of sloughing off the lingering effects of the economic malaise. The state added 70,300 jobs last year and should pick up another 63,200 this year, Dhawan predicts. The unemployment rate should dip to 7.5 percent in 2015.
Dhawan looks to the information technology sector, and its reliance on health care reform, as an engine of job growth. Wednesday afternoon — as if on cue — Ernst & Young announced the creation of 400 good-paying IT jobs in Alpharetta. Dhawan expects, overall, personal income will grow 4.2 percent this year and above 5 percent the ensuing two years.
Home sales bolster the economic good times. John Hunt, a senior analyst with Smart Numbers, which analyzes the region’s real estate prospects, ticked off some long-awaited good housing news: 2012 resale prices were up a whopping 29 percent versus the previous year; closings have risen for 11 straight months; and the number of first-time home buyers has returned to 2003 levels.
“But we’re going into the Spring market without supply,” Hunt said. “We’ve burned through inventory and new construction is beginning to come — finally.”
Worries of slowing exports and dysfunctional European (and Japanese) economies tempered the upbeat economic talk Wednesday. The upcoming sequestration — with its deep, congressionally mandated budget cuts — could squelch any economic recovery if a deal isn’t soon hammered out in Washington.
Dhawan, though, expects Congress to muddle along and, eventually, reach a financially palatable deal by year’s end.
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