Editor’s note: This article has been updated to include more details on how Atlanta’s job growth compared with other parts of Georgia and examples of small businesses with hiring plans in the metro area.
The economy is still moving in the right direction, but Atlanta no longer seems to be in a hurry when it comes to hiring.
Like every August, schools reopened, executives returned from the beach and factories ended their July furloughs. That usually helps the jobs market bounce back from the summer doldrums.
But metro Atlanta’s unemployment rate didn’t budge from 3.5% in July. The region added just 12,300 jobs last month, about half as many as August 2018, and well below the average August growth the previous five years, according to a report Thursday from the Georgia Department of Labor.
Atlanta’s economy shows no signs of a downturn: The number of people who are working has grown, real estate prices have continued to rise and new jobless claims – which signal layoffs – are down from a year ago.
Still, Thursday’s weaker numbers came as a surprise after the labor department reported last week that Georgia in August posted the strongest jobs increase in two decades - highlighting Atlanta is no longer grabbing the lion’s share of growth. In the past year, the metro area has accounted for about 50% of the state’s job growth, compared with 60% and sometimes 70% in previous years.
Since August of 2018, metro Atlanta’s economy has added 42,500 jobs. In the 12 months before that, the economy added 64,900 jobs. In contrast, Georgia as a whole added 84,600 jobs in the previous 12 months, about the same as in each of the previous two years.
Although no other Georgia metro area added as many jobs as Atlanta since August 2018, six grew at a faster pace. Gainesville grew fastest – expanding at a 4.2% clip – followed by Rome and Brunswick, which each expanded at 2.9%. Atlanta grew 1.5%.
Hiring in Georgia’s largest metro area has slowed in a number of sectors, especially corporate jobs, retail and warehousing. Construction – which has been the fastest-growing sector for several years, providing solid wages for many workers without a college degree – lost about 500 jobs during the month.
Slowdown doesn’t mean downturn
There are still many bright spots. For instance, the critical engine of small business appears to have kept churning — especially in the tech area.
One example is Drum Technologies, an Atlanta-based start-up funded by the founders of Kabbage, a local firm that loans money to small businesses. The new company is aimed at being a conduit for companies to hire sales staff as needed — the way “gig” companies hire drivers and dog-walkers.
During the next year, Drum plans to add 60 jobs to its own staff, “tech, administration, marketing, across the board,” said company spokeswoman Ann Noder.
When start-ups succeed, that initial investment pays off for the larger economy. For example, Urjanet – which last week announced a high-profile partnership with Equifax – is a 450-worker, Atlanta-based firm whose technology came out of Georgia Tech and was funded by the Georgia Resource Alliance.
Among a number of investors in Urjanet is Cox Enterprises, which owns The Atlanta Journal-Constitution.
“People are bullish on the economy. I would say that the appetite for businesses looking for financing is as strong as it has been,” said Tom Briggette, chief operating officer of Atlanta-based Pioneer Capital Group, which makes short-term loans.
But when it comes to start-ups, the most common source of funding is the entrepreneur himself or herself. Or, in the case of the new Sylvan Learning Center in Alpharetta, both.
Nhan Dinh, 37, and his wife, An Hong Tran, 33, wanted to diversify from the lawnmower repair business they started years ago. The company has grown to about 30 employees doing $6 million a year in revenues, most of it selling equipment online.
Looking for other ventures, the couple liked the idea of Sylvan, which offers testing, tutoring and preparation for standardized exams. Between the recent purchase of the franchise and the needed renovations on the site to make it kid-ready, he and his wife may spend more than $100,000 on the new business.
To make the business work will require 50 students. The testing and tutoring requires a certified teacher for every three students, Dinh said, people who are paid between $13 and $22 an hour for the part-time work.
Success depends on having parents who care about their children’s academic improvement – and who have money to invest in it, he said. “I am betting everything on it.”
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