Look for growth to be solid for Atlanta and Georgia in the coming year, although expansion will be dampened if the central bank lifts interest rates, predicts the Economic Forecasting Center of Georgia State University in a report to be released this morning.
The state will add 74,100 jobs this calendar year, about one-fifth of them well-paying, “premium” jobs, according to Rajeev Dhawan, the center’s director.
“The Peach State job engine is indeed humming,” he said, in statement that will be released at the center’s quarterly forecasting conference today.
In 2015, the state economy will add 83,600 jobs, with about the same proportion of them categorized as “premium,” according to Dhawan’s report. Job growth will be concentrated in professional and business services, but manufacturing, education and healthcare will all expand, he predicted.
The unemployment rate, which is currently 7.8 percent in Georgia, will slide through the next two years. Joblessness should average 6.5 percent next year and 5.9 percent the year after, he predicted.
Paralleling the center’s projection for Georgia is the forecast for metro Atlanta, which represents more than half the state’s economy: Metro Atlanta will add 55,600 jobs next year and slightly more in the year after, Dhawan said.
The most likely obstacles to local growth will be global factors – especially rising oil prices and Chinese economic woes – combined with the expected decision of the Federal Reserve Bank to raise interest rates.
Energy costs can divert consumer spending from other choices. Higher rates can dampen business expansion or chill home-buying, which can be a broader burden since construction remains an important part of the growth story in metro Atlanta.
The metro area’s housing and office construction has picked up dramatically in the past year.
But because consumer spending is so critical to growth, 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.
Consumer spending, which accounts for more than two-thirds of the economy, has been erratic – a result of lingering debt, lackluster job growth and stagnant wages.
That means American consumer spending will depend partly on the assets that most households look to for wealth and security and investment.
For example, when stocks rise, consumers tend to feel richer and spend more – a behavior known as “the wealth effect,” he said. “Going forward, the health of the stock market will be critical for consumer spending on big-ticket items and durable goods.”
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