State jobs added and projected. Roughly 8 of 10 are in metro Atlanta:
2014 …… 146,500
2015 ……75,100
2016 ….. 74,000
2017 ….. 80,800
Sources: Georgia State Economic Forecasting Center, Bureau of Labor Statistics
Georgia’s economy will keep growing modestly, but at a pace slowed by global constraints and uncertainties, according to a closely-watched local forecast released Wednesday.
The state will add about 74,000 jobs during the next year – about the same as this year – as tmanufacturers and big companies contend with trouble in economies from Europe to Asia, according to the Georgia State Economic Forecasting Center.
Georgia added 146,500 jobs in 2014, but that could not be sustained, said Rajeev Dhawan, director of the center, during the group’s quarterly conference.
“Overall, U.S. trade is not as strong as it was two years ago,” he said. “China is in a full-blown stall. And about 25 percent of our exports are with Europe. For them not to come back quickly is bad news for our corporate sector.”
Another potential headwind will come from the Federal Reserve, which is expected to hike benchmark interest rates next month, he said. “They are ringing the cowbell for very loudly for December.”
The benchmark rate – used as a peg for others – has been at or near zero since the recession. But counter-intuitively, that first increase may actually be great for home-buying, even if it nudges mortgage rates up slightly, Dhawan said.
Fear that the hikes will continue can push people from procrastination to purchase, he said.
“There’s a big body of fence-sitters who will come out to buy houses.”
Georgia’s increased engagement in the world economy shows in both strength and weakness, Dhawan said: the pace of job growth in Georgia has slowed more than in most other leading states.
Texas, hit by the slowdown in oil prices, saw companies put the brakes on hiring, he said. But “other leading GDP states, namely California and Florida, have not seen this kind of deceleration.”
But unless global events badly deteriorate, it won’t be enough to chill Georgia’s growth completely, he said.
Unemployment rates for the state will continue to decline slowly, although they will still be higher than the national average through 2017, according to the center’s projection.
The greatest economic dangers may come from the political sphere: government shutdowns, budget crises and anxiety about the presidential election, he said. “… You could have two candidates running next year and business looks at them and thinks, ‘We’re in trouble with either one.’”
Metro Atlanta will continue to produce eight of every 10 new jobs in the state, according to Dhawan’s projection. The region will finish this year with 61,700 added jobs – 82 percent of the state’s total, Dhawan said.
He predicts metro Atlanta will add 59,800 jobs next year, eight of every 10 in the state.
Export companies have been hurt by weak demand from some countries and in others by the higher value of the American dollar. Yet hospitality – a relatively low-paying sector – has seen solid growth, thanks to a surge in the number of conventions and large meetings.
Hospitality jobs have grown by 5 percent, Dhawan said. Healthcare is stronger still, adding 11,400 new jobs in the first nine months of this year – one of every four new jobs, he said.
The Fed’s attitude about a rate hike would probably change if the stock market hits the skids, Dhawan said.
“Rate hikes are intended to slow, not stall, the economy,” Dhawan said. And with economic growth already less-than-robust. “There is little margin for error.”
