Worksource Atlanta is blaming the state for no answers.

Trade tussle not helping Atlanta’s job growth in August

While worry builds about the impact of a trade battle with China, the metro Atlanta economy has kept growing by leaning on sectors that are fueled mostly by local demand.

That continued growth clipped the region’s unemployment rate to 3.6 percent in August, its lowest level since mid-2001, according to a report Thursday morning by the Georgia Department of Labor.

During the month, the region added 14,900 jobs, the department said, adding to a long expansion that has drawn many companies to Atlanta and made the region a promising place to start a business, as well.

“I think Atlanta is a very vibrant job market with a diverse workforce and a lot of skill sets,” said Rob Chen, newly named chief executive officer of Brightlink, a nine-year-old, Atlanta-based company with nearly 100 employees.

The company, which supplies both telecommunications software and infrastructure for managing communications, has added tech and engineer jobs, as well as sales, marketing and customer service positions, he said. “We don’t have to import a lot of people from outside Atlanta.”

Laura Estrada, co-owner with her husband of seven restaurants in metro Atlanta and north Georgia. Her business depends on local consumers. (Contributed)
Photo: The Atlanta Journal-Constitution

In the past year, Atlanta has grown by 53,700 jobs and a significant piece of the expansion is tied to trade: logistics and retail jobs account for almost one-quarter of the hiring, according to the U.S Bureau of labor Statistics. That includes jobs in the ports, in warehouses and distributions centers like Amazon’s, trucking and stores.

There has also been growth in manufacturing, which exports internationally, and in the corporate sector, which includes many companies with operations nationally and globally.

But this past month, there have been whiffs of a problem in those sectors, with hiring down.

The sector that includes logistics and drivers lost 4,100 jobs. Manufacturing dropped 1,000 positions. And the corporate sector edged down by 500 jobs.

While one month’s data is unreliable, that is where the first signs of damage would appear if a trade war were starting to nibble at Atlanta’s growth.

And even if a trade war is making trouble, it wouldn’t turn the economy around all at once since most Atlanta growth has been fueled by local businesses and local consumers.

In the past year, the biggest slice of the hiring pie – nearly one-third of it – is accounted for by schools and healthcare. Construction hiring accounted for one of every five jobs. Leisure and hospitality was close behind, representing 18 percent of new jobs.

That barometer has so far shown a healthy local environment, says Laura Estrada, co-owner with her husband of seven restaurants. They have an Italian “concept,” a seafood eatery and five Pueblos Mexican restaurants, including Suwanee and Cumming.

All told, they have several hundred employees, about one-quarter of them full-timers, she said.

“What people don’t seem to realize is that there is money to be made,” she said. “Some people in the back of the house can start off making $50,000 a year and some of our servers are making $1,000 a week.”

The low unemployment rate has put the onus on employers, Estrada said. “We see people hopping around quite a bit from one restaurant to another. We still don’t have a high turnover… but it’s harder to do that now.”

It’s not just local eating that does well in a healthy economy. Many other services simply have to be done locally. Like electrical work.

Derrick Mosley, president and co-owner of RBG Electrical in Marietta. Demand for his company’s services are growing and he is hiring, he said. (Contributed)
Photo: The Atlanta Journal-Constitution

RBG Electrical in Marietta is about a decade old. The company has about 20 employees, most of them electricians and their support in “the field,” who handle both low- and high-voltage matters, said Derrick Mosley, president and co-owner of the company.

RBG clients are generally companies not consumers. And business is good, Mosley said. “We anticipate that by the end of the year, we will probably get up around 30 employees.”

The start-up capital for “Main Street” businesses is also often local.

Access to Capital for Entrepreneurs, a nearly 20-year-old not-for-profit organization that has loaned more than $56 million to about 850 entrepreneurs, who have created or saved more than 7,300 jobs in Georgia, said Grace Fricks, founder and president.

Local money going to local companies is like a virtuous circle that builds local wealth, she said. “We fund those ‘Main Street’ businesses like hair care or coffee shops, dry cleaning, health or business services.”

Grace Fricks, president and chief executive of Access to Capital for Entrepreneurs. “Main Street” businesses are often dependent on local funding, not money from national banks, she said. (Contributed)
Photo: The Atlanta Journal-Constitution

Yet in the longer-term, the Atlanta economy is more entangled than ever before with national and global realities.

If corporate offices shrink and well-paid positions disappear, it would chill demand at local businesses. If trade flows ebb, that undermines the need for cargo handlers, warehouse workers, fork-lift operators and truck drivers.

A global problem can quickly move to Main Street, said Derrick Mosley, who runs RBG Electrical.

“My concern is whether we will continue to have sustainable growth,” he said. “If we have a trade war with China or a real war with North Korea, that would have an impact on our business.”

Unemployment rate, August

Current: 3.6 percent, (2018)

Highest: 10.5 percent, (2010)

Lowest: 3.1 percent, (1999)

Sources: Bureau of Labor Statistics, Georgia Department of Labor

Share of metro Atlanta job growth, past 12 months:

Education and healthcare: 31 percent

Logistics and retail: 24 percent

Construction: 21 percent

Leisure and hospitality: 18 percent

Sources: Bureau of Labor Statistics, Georgia Department of Labor

Atlanta job growth, January through August:

2008: -49,700

2009: -122,200

2010: 1,800

2011: 17,000

2012: 17,700

2013: 31,900

2014: 55,100

2015: 17,900

2016: 30,400

2017: 13,800

2018: 24,400

Sources: Bureau of Labor Statistics, Georgia Department of Labor

Atlanta sectors that grew last month:

Education and health services

Government

Construction

Sources: Bureau of Labor Statistics, Georgia Department of Labor

Atlanta sectors that shrank last month:

Trade and Transportation

Leisure and Hospitality

Corporate

Manufacturing

Sources: Bureau of Labor Statistics, Georgia Department of Labor

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