While the national economic reports spell gloom and doom for the most part, the economy in Middle Georgia has not taken as much of a hit as some pockets of the country, but there will be some challenges in the short term.
Two academic experts gave their forecast Tuesday at the 18th annual Middle Georgia Economic Outlook 2009, held at the Wilson Convention Center in Macon. About 265 people were in attendance.
The mixture of industries in the midstate has helped insulate the area from massive job losses in one particular sector, said Mercer University economics professor Roger Tutterow.
“In Central Georgia we are either in line or outpacing growth in the balance of the state,” he said. “There has been some retraction here but it’s not as deep as the statewide retraction.”
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One main thing that actually helps the midstate is its manufacturing role has dropped, so the region was not severely hurt when that industry nationwide took a sharp downward turn, Tutterow said.
While manufacturing employment in Middle Georgia was down 8.9 percent in 2001, it was down 5.75 percent in 2008, he said. On the other hand, construction employment was down 2.4 percent in 2001, and in 2008 it was down 8.5 percent.
Other pluses for the economy here is that the education and health-care industries have held up, the role of the military is stable and we have a good quality of life, he said. Also, being located in the middle of the state helps draw companies looking for convenience to the rest of the state.
But, the national downturn is not over and job gains will lag even when it improves, he said. Retailers are still hurting and financial institutions are under pressure, which will affect the local economy.
Pat Topping, vice president of the Macon Economic Development Commission, said after the meeting he wasn’t surprised by the predictions for 2009.
“We’ve always said here in Middle Georgia that we don’t have the big peaks and valleys,” Topping said. “When the economy is really booming, we are probably lagging a little bit behind. By the same token when we are in a recession, we are not hurt as other areas.”
John Conn, with Conn Realty in Gray, said he expects some leveling out in the housing industry to occur soon.
The downturn in new home construction is actually helping absorb existing homes on the market.
“I expect it to bottom out in the third quarter,” Conn said.
A look at the statewide economy is not quite as hopeful as Middle Georgia, but it’s not as bad as it could be.
Georgia’s economy looks pretty grim and the recession will be “severe rather than mild and prolonged rather than short,” Robert Sumichrast, dean of the University of Georgia’s Terry College of Business, said to attendees.
The first and second quarters of 2009 will be “dreadful” and how bad and how long will depend on when the credit markets thaw, he said.
State unemployment is expected to double this year and is expected to peak at about 9 percent in the first quarter of 2010, Sumichrast said. Unemployment rates in Middle Georgia rose from 5 percent in January 2008 to 7.4 percent in November. The December rate has not been reported yet.
New housing permits in Georgia have dropped about 75 percent since their peak in the first quarter of 2006. The state’s single-family housing starts are at their lowest level since the 1981 recession, he said. Commercial construction is down and we should not expect to see an upturn before mid-2010.
Historically, a recession lasts about 10 months, but Sumichrast predicted this recession will last about 18 months.
“I know you feel awful,” he said. “We are about halfway through the really bad stuff,” he said. “This is not the time to lose your nerve or panic. We are not staring down a 1930 recession.”
Actually, this is the time to take advantage of the recovery that’s coming later this year and into the beginning of 2010, he said.
“This is the time to plan and soon it will be time to act,” he said. “You can take advantage of the economic recovery that’s coming this year.”
“Where there is chaos, there is opportunity,” he said. “I believe during the next two or three quarters is the best time for existing businesses to take market share away from their competitors.”