Georgia growth continues*
year jobs
2013 83,400
2014 65,100
2015 89,200
2016 100,100
Georgia personal income tax collections
2010 -9.1
2011 9.1
2012 6.3
2013 7.5
2014 3.9
Housing permits: Cobb, DeKalb, Fulton and Gwinnett counties
2007 25,174
2014 14,921
2015 15,048
2016 17,124
*projections by Rajeev Dhawan, director, Economic Forecasting Center, Georgia State University
Read about the newest business to relocate its corporate headquarters to Atlanta in the business section.
After getting off to a chilly start this year, the Georgia economy has heated up with a spurt of hiring that should continue through the next two-and-a-half years, according to the Economic Forecasting Center at Georgia State.
Roughly 65,100 more jobs will be added to the economy this year, and 89,200 the year after – which is slightly better than the state did in 2013, said Rajeev Dhawan, director of the center during its quarterly conference.
“In the first three months, Georgia added only 6,000-odd jobs, due to the weather effect,” he said.
Dhawan’s forecast is just slightly more optimistic than the general consensus of economists for the current quarter, but slightly less rosy for the year as a whole. His projection is likewise slightly less upbeat than the consensus for next year’s growth.
Nearly five years after the official end of the Great Recession, the pace of improvement is gaining momentum but unspectacular in Georgia. Only about one in five new jobs will be in higher-paying sectors, like manufacturing and technology, he said.
Growth has been solid in retail, leisure and hospitality – sectors in which jobs are plentiful, but pay is modest. Still, fewer people are working than before the recession started in late 2007.
The lack of higher pay hampers the whole economy by dampening consumer spending on everything from cars to candy, Dhawan said. “First and foremost, it’s about disposable income.”
Moreover, more than one-third the homeowners in metro Atlanta are “underwater” – owing more on their mortgage than their house is worth.
Home values are a key ingredient of the so-called wealth effect: When the value of assets such as houses and stocks rises, people spend more, boosting the broader economy. When values drop, spending tends to dry up.
Still, the economy is moving the right direction. Home prices are rising in most areas, while some well-paying job sectors are on the rise. Among the new jobs with higher compensation are those like project managers, financial executives and software engineers — especially those with expertise in health care.
Dhawan projects construction will spur thousands of new jobs, with the building of huge stadiums for the Falcons in Atlanta and the Braves in Cobb County – along with new apartment complexes and tens of thousands of single-family homes. Additionally, the deepening of the Savannah port should also mean work, as well as potentially more trade.
Real estate has been central to the Georgia economy in recent years – for better or worse. After the 2001 recession, expansion included a disproportionate number of real estate jobs, while job losses in the same sector were painfully heavy during the recession and after.
And while housing now does not approach its previous importance, at least it is once again a plus. The number of housing permits in metro Atlanta jumped 70 percent last year to 24,065 units and will come close to hitting that level this year, Dhawan said.
Home prices have been rising at a double-digit pace, although Dhawan predicted that a modest increase in interest rates will slow that rise.
Unemployment last month was 7 percent in the state and 6.5 percent in metro Atlanta. The jobless rate should keep dropping through this year and into the next, averaging well below 6 percent for both region and state by 2016, he said.
In that year, the Georgia economy should add 100,100 jobs — the first time job growth will have hit six figures since 2000.
During the 1990s, the state added more than 100,000 jobs in a year five times. But the population and labor force have grown since then, so six figures now is attainable with a slower pace of growth than during the 1990s.
Even so, modest job growth beats no job growth.
And the first-quarter slowdown in Georgia paralleled the nation’s winter malaise: the economy shrank at a 1 percent rate during the first quarter, according to the U.S. Commerce Department, the first time in three years that the U.S. economy had declined.
Yet financial markets were largely unfazed, apparently seeing the slowdown as temporary.
Bolstering that notion was a Labor Department report that showed a lower-than-expected 300,000 laid-off workers across the country had filed last week for unemployment insurance. During the past four weeks, those filings have been at their lowest level since 2007.
About the Author
