What restaurants tell us about the economy

Restaurants sit at a critical junction of the economy.

When people have decent incomes and manageable debts, they have disposable income and – especially in a place like metro Atlanta, with its culture of dining out – they disperse a lot of that money in restaurants and bars.

That makes restaurant business is something of a barometer. Two recent examples:

— In the spring of 2008, a few months after the economy slipped into recession, the Georgia economy began to shed jobs.

By early 2010, the state had lost a painful 8.7 percent of all jobs. During the same period, employment in food services and drinking establishments likewise hit the skids – only slightly worse: 10.4 percent of the sector’s positions were lost.

— As the economy recovered, hiring heated up and in the five years that followed, the number of jobs in the state surged by 9.3 percent.

The food and drinking sector made that look weak, roaring to a 21.9 percent gain in that same period.

Slowdown worries

Now, there’s some loud worry about a slowdown in job growth, based on monthly data this year through May.

But many restaurant owners say the evidence on the ground – or at least in the tabs at the end of the meal – isn’t there. High demand for eating out has made many optimistic.

“There is evidence about the economy, as things get better for us,” Arnette said. “We see customers being more open to spending a little more money. They buy more wine or better wine. And they’ll bring business clients. During the downturn, corporate expense accounts went away for a while.”

Restaurants continue to open – Arnette, in fact, has a fourth in the works — which suggests the metro Atlanta economy must be doing pretty well.

Yet even Arnette cautions about making too grand a statement. After all, restaurant customers are only part of a much larger recipe.

In fact, he’s proof that the business does not always sync with the larger economy. He opened his first restaurant during the sluggish growth of 2003. He opened his second in late 2007, just before the start of a painful recession. Both are still open.

“One of the great things about a restaurant is that you can be successful in an economic downturn,” Arnette said.

That depends partly on where you are, of course. And if economics is local, Arnette likes his locality.

Feeling good

“I feel like the (metro Atlanta) economy is good because I feel like the Brookhaven economy seems real strong,” he said.

Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University, said that can be true. But if most of an area is seeing restaurant growth, the message can only be positive.

“It is like a confirmation of domestic growth,” he said.

Jobs data suggest the metro restaurant surge is broad-based.

Since 2011, the number of food preparation jobs in the region is up 19 percent – exceeding the pace of hiring overall, according to government data crunched by Lucas Puente, chief economist at Thumbtack, an online service.

Restaurant jobs aren’t necessarily high-paying, of course. Some waiters and waitresses in higher-end eateries can do very well, but many other kitchen or wait staff jobs are low paying.

But at least, in times of growth, there are a lot of positions.

“It is a labor intensive sector,” Dhawan said. “When you grow the airline business 20 percent, you don’t grow employees 20 percent. But if you grow the restaurant business 20 percent, you are going to need 20 percent more people.”

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