Look to housing for help, growth in retail strong, forecaster says
Georgia Prediction:
2014 — 65,100 new jobs
2015 — 89,200 new jobs
2016 — 100,100 new jobs
Source: Georgia State University, Economic Forecasting Center
A year of slow – and slowing – growth in 2014 will shift to an economic pick-up next year, according to a forecast from the Economic Forecasting Center at Georgia State.
Handicapped by bad weather in the first few months of this year, the state will end the year with 65,100 jobs new jobs, but accelerate to growth of 89,200 jobs in 2015 and 100,100 jobs the year after that, according to the prediction, which is to be released this morning during the center’s quarterly forecasting conference.
That will translate to a steady decline in the unemployment rate, said Rajeev Dhawan, director of the center.
Home prices and construction will keep rising, but a strong economic bounce hinges on whether businesses start investing more enthusiastically, he wrote in his report.
The region should see “significant growth” in construction, a combination of apartment building and the huge new Falcons stadium planned for downtown Atlanta, Dhawan wrote.
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 in the bust that began about six years later.
The slow job creation since 2009 has often been linked to the equally sluggish improvement in housing.
And while housing now does not approach its previous importance, at least it is again a plus. The number of housing permits in metro Atlanta jumped 70 percent last year to 24,065 units. The number of permits will come close to 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 and mortgage rates will dampen that rise during the next few months.
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, Dhawan said.
The majority of positions being created are relatively low-paying, he said: about 23 percent of the new jobs in the state this year will be “premium” jobs paying at least $60,000 a year, he predicted.
Jobs in retail and hospitality accounted for 40 percent of new jobs in Georgia last year.
Those sectors depend on jobs and income elsewhere, so high energy prices and slow growth in other sectors will have a ripple effect, Dhawan said. “Momentum will slow this year for these sectors.”
The national economy too will see modest growth this year and next, but look for a solid expansion after that, he said. After years of sluggish growth, “2016 will mark a great year by the current recovery standard.”
