After more than five long years of recession and its painful aftermath, metro Atlanta’s economy is struggling not only to recover but simply to close the gap with the national economy.
The region fell harder than many U.S. metro areas and has emerged to find it is no longer the shiny boomtown that led the nation in growth for decades. Outsized ambitions have been downsized.
“I think we are poised to out-perform the rest of the nation, but by a very small margin,” said Jeffrey M. Humphreys, director of the Selig Center for Economic Growth at the University of Georgia.
A few recent metrics show improvement, as well as the distance left.
— The region’s unemployment rate of 7.6 percent was just above the national rate of 7.5 percent in April. But the national rate ticked up to 7.6 percent in May, while the metro rate for May is not available yet. At one point the region’s rate was more than a full point above the nation’s. Since its 2011 peak, the rate has fallen 2.7 percentage points in metro Atlanta vs. 1.5 points nationally.
— Job growth has picked up, with the Atlanta region’s now running slightly ahead of the nation’s, but it remains modest. Metro Atlanta still has 98,573 fewer jobs than before the recession. After previous downturns, the job market recovered within months, not years.
— Income in Atlanta had pulled ahead of the national average in the early 2000s, only to slip below it in 2008. That gap remains fairly steady, with metro Atlanta at about $2,500 below the per capita income of $42,673.
— Housing, which cost the region many tens of thousands of jobs after the bubble burst, has seemingly stabilized. Sales and prices are up, while the foreclosure wave appears to have crested. That is good news for people who have wanted to sell homes – assuming they are not still ‘underwater,’ owing more than their homes are worth. A healthier housing market also fuels retail spending, job creation and job mobility.
“I see a slight slowdown this year, then a pick-up after that,” said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “We’d grow the way we did in 2003 to 2007, not as fast as in the ’90s.”
In terms of jobs, “If my forecast holds true, it will be mid-2014 before we are back above the old levels,” Dhawan said.
In the late 1990s, when Atlanta was a shining star of growth, the unemployment rate was at historic lows and jobseekers tended to land positions pretty quickly. Now, the Atlanta economy is growing, not surging. Nearly all sectors are hiring, but there aren’t many that are really hot.
And with so many people still out of work, the onus is on jobseekers to hustle, to network and sometimes to look elsewhere.
“You can’t have too many friends and you can’t connect with too many people,” said salesman John Walsh, 49, of Lawrenceville. He was laid off from a job at a paper company seven months ago and has been looking since then.
“We’d consider moving. I am open to it,” he said, adding he was in the running for a job in Fort Worth, Texas.
“I know a lot of people who are underemployed,” Walsh said, “and I know a lot of people who have given up.”
Kyle Coleman gave up - not on her job hunt but on metro Atlanta.
Born here, Coleman, 30, lost her job in retail last year and had been living with relatives, along with her young daughter. In March, she moved to Minneapolis.
“It was scary. By the time I got to Chicago, the tears were building up – I was so afraid that I was doing the wrong thing.”
Since then, she’s landed two part-time jobs – one as a driving instructor, one as a security guard – along with a temp position for a staffing company.
Atlanta’s economy still has many strengths, but the recipe that made Atlanta special economically has been rewritten since 2000.
“It was the three ‘T’s,” said Dhawan. “It was transportation, tourism and telecom. And they were firing on all cylinders in the ’90s.”
After the 2001 recession, Atlanta never regained its momentum – despite a housing bubble that temporarily padded the economy with tens of thousands of jobs. Even a new housing boom would not have the same effect as a surge in manufacturing or technology.
“Housing isn’t as high octane as the other things,” Dhawan said.
Despite two recessions, both the U.S. economy and Georgia’s are larger than in 2000.
But they have not grown in parallel: Since 2000, the U.S. economy has expanded 71 percent faster than Georgia’s, according to a measure known as the coincident economic activity index, tracked by the St. Louis Federal Reserve Bank.
During past boomtimes, Georgia’s primary appeal to relocating or new businesses was affordable housing, good weather and great transportation access.
Amid the altered landscape, state government has become more aggressive in using “deal-closing” incentives - tax credits, grants or other taxpaper-funded inducements - to lure companies. Recent examples include big announcements by equipment-maker Caterpillar and drug-maker Baxter to open new facilities - decisions made easier by tens of millions in incentives.
Meanwhile, many of the state’s businesses have honed their productivity. The downside was a long wave of layoffs, but the upside is company readiness now to grow as sales improve, said Humphreys.
The state also stands to benefit from the coming tide of Baby Boomer retirements, he said.
As they leave the workforce, those people open up jobs for other workers and spend savings and investment money. Georgia keeps more than its share of retirees, while attracting many others from around the country.
“That means we are in for 28 years of a demographic pig in the python,” Humphreys said.
There are other pluses, he said: the state should also keep enticing young, ambitious people, many of them coming to – and graduating from – schools here, then sticking around.
And with global trade likely to keep growing, Georgia’s ports – air and sea – should remain a key advantage. With that should come more demand for manufacturing – although it may not be accompanied by massive hiring.
Still, the days of sprinting away from the pack seem over, Humphreys said.
“We lost our edge.”
About the Author
