Economic forecast: Midstate should grow in 2013

But risk of recession remains; job growth will be slow

lmorris@macon.comDecember 11, 2012 

As it commonly goes with economic forecasting, some good news is usually tempered by some not-so-good news.

About 200 people gathered Tuesday at the Wilson Convention Center in Macon for the 2013 Georgia Economic Outlook luncheon to hear from local and state economists about what the coming year is expected to bring.

“The economy is going to grow in 2013 (in Georgia), and in fact it will grow faster than the country overall,” said Robert Sumichrast, dean of the University of Georgia’s Terry College of Business.

The state’s gross domestic product is expected to rise by 2.1 percent, while the national economy will grow by about 1.8 percent, Sumichrast said.

However, “the risk of a recession in 2013 is still high -- I would guess at about 30 percent,” he said. Also, “Georgia suffered disproportionate job losses during the recession and has recovered more slowly than the country.”

But because of the low cost to do business in the state, logistics and tax advantages, Georgia remains competitive with other states when it comes to landing new businesses, he said. Part of this is because legislation passed this year, including the creation of a $100 million “deal-closing fund” makes the Peach State much more competitive.

The Middle Georgia economy is expected to grow next year at about the same rate as the state, said Roger Tutterow, professor of Economics at Mercer University.

“I would submit that you could sum up the recovery of the past three and a half years ... by asking the question: What concentration of the local economy was in construction or real estate or in durable manufacturing?” Tutterow said. “The more your local economy was in education and health care, the better it was.”

In looking at Georgia’s metropolitan statistical areas, the four that held up the best -- Warner Robins, Columbus, Augusta and Hinesville -- had one thing in common, he said.

“All were blessed to have a significant military presence,” he said.

Even though employment has dropped about 6 percent in the Macon and Warner Robins areas, “we did not contract as much as the rest of the state during the darkest days of the recession,” he said. “During the good times, we don’t add as many jobs and during the bad times, we don’t shed as many jobs.”

Also, it helped that Middle Georgia didn’t really have a housing bubble.

“In the housing market, we generally build as we need it,” Tutterow said. “It did not hit us as much as the nation. ... We did not have a gain of 55 percent in a single year as Las Vegas did, but we also didn’t have the pain of being 60 percent down.”

When looking at Middle Georgia, “diversification matters,” when it comes to what industries we should try to attract here, he said. Also, he pointed out how important regionalism is to the area.

As a collective group, the region should be competing for industries.

“At the end of the day, it’s those sectors that produce goods and services that export outside the region that actually (help the local economy),” he said.

Pat Topping, senior vice president of the Macon Economic Development Commission, said he was hopeful after the hearing what the economists predicted.

“What was really encouraging was to hear the conversation about regionalism, and how we all need to emphasize the benefit of a regional economy,” Topping said. “We need to be cautiously optimistic.”

But the economists also “laid out one of our biggest threats, which is K through 12 education,” he said. “ That is going to be critical for the success of any community.”

Another troublesome issue that was brought up is what has been called a “skills gap” in our work force, Topping said.

“Workers today have to understand that they must take advantage of the training opportunities and retraining opportunities available,” he said. “People are probably going from job to job over the course of a lifetime, and it’s important people get the training and the skills that they need to make themselves attractive candidates.”

To contact writer Linda S. Morris, call 744-4223.

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