Georgia economic growth to continue says GSU economist

Atlanta ….. 2,404.8 …….. 2.2% ……. 2.4%

Augusta ………217.8 ……. 1.4% …….. 1.8%

Columbus …… 121.3 …….. 0.7% ……. 1.6%

Macon …………. 98.7 ……. 0.4% …… 1.3%

Savannah ……. 161.0 ……… 2.2% ….. 2.6%

Source: Georgia State University Economic Forecasting Center

Metro Atlanta outlook

Job growth in 2014: 52,900

Job growth in 2015: 55,600

Unemployment rate, average, 2014: 6.9%

Unemployment rate, average, 2015: 6.3%

Number of housing permits, 2014: 24,143

Number of housing permits, 2015: 25,572

Source: Georgia State University Economic Forecasting Center

Atlanta and Georgia seem headed into several years of decent growth, said Rajeev Dhawan, director of the Georgia State Economic Forecasting Center.

Debt is down, job creation is up, and with consumers accounting for more than two-thirds of the economy, the expansion has entered a more encouraging phase, he said during the center’s quarterly conference on Wednesday.

But anecdotes he is hearing give him even more confidence about the economy’s direction.

He read a headline that ran in The Atlanta Journal-Constitution earlier this month. “Food truck caters to dogs.”

“That is when you know people have some money to spend,” Dhawan said

In the boom that accompanied the housing bubble, home prices were soaring and many homeowners traded in equity for cash. Now, many homeowners are still struggling with depressed values or are treating their equity with more respect.

“There’s no more home piggy bank to go to,” Dhawan said.

But more Georgians each month have jobs. And instead of their mortgages, many Americans look to Wall Street as measure of their own financial status, he said.

“Consumer confidence is nothing but a function of the stock market.”

Dhawan predicted Georgia will finish this calendar year with 74,100 more jobs, despite a first quarter burdened with chill, snow and region-paralyzing ice, Dhawan said. About one-fifth of the positions will be well-paying, “premium” jobs, he predicted.

In 2015, the state economy will add 83,600 jobs, with about the same proportion of them categorized as “premium,” according to Dhawan predicted. Job growth will be concentrated in professional and business services, but manufacturing, education and healthcare will all expand, he said.

Metro Atlanta, which represents more than half the state’s economy, will add 55,600 of the state’s jobs next year and slightly more in the year after, Dhawan said.

The most likely obstacles to local growth are global factors and “policy mistakes,” he said.

Overseas, turmoil in the Middle East and trouble in Ukraine can hurt American pocketbooks mostly by sparking a rise in oil prices. Higher energy costs would divert consumer spending from other choices.

At home, the Federal Reserve could finally decide to put its foot on the economic brake by lifting short-term interest rates. Higher interest rates could dampen business expansion or chill home-buying.

Higher energy costs would divert consumer spending from other choices. Higher interest rates could dampen business expansion or chill home-buying.

Construction remains an important part of the growth story in metro Atlanta, and the metro area’s housing and office construction has picked up dramatically in the past year.

But there is some danger that the region’s developers could “overreach,” Dhawan warned. “If all the high-rise apartment plans currently announced for Midtown receive financing, it could happen.”

The bulk of the units added to the market next year will be in multi-family housing, he said.

Nationally, growth should be slightly better in 2015, Dhawan said, predicting a 2.4 percent expansion compared to the expected 2.0 percent average this year. However, he said job growth will slip to 188,000 a month next year.

Job growth has been averaging more than 200,000 a month for the first time since the 1990s. Those recent numbers are good, just not as robust as they used to be, since the labor force is much larger now, Dhawan said. “That 200,000 now is not the same as 200,000 back then.”

The unemployment rate will continue to drop through the next two years, he said.

But Dhawan discounted the past several months of official job reports, which showed the unemployment rate rising to 7.8 percent for Georgia and 8 percent for metro Atlanta.

Dhawan said he pays much more attention to indicators like income, job creation and state tax coffers – real signs of the economic situation.

“Unemployment is the most misleading statistic to measure the health of the economy,” he said. “Everything is a little misleading.