Business owners and economists had a positive feeling about 2014 for the most part and are upbeat about 2015.
This was the overall message Thursday for Middle Georgia and the state from the speakers at the Georgia Economic Outlook luncheon held at the Wilson Convention Center.
Midstate businesses showed an overall positive performance and high expectations for sales and profit in 2015, Aleksandar “Sasha” Tomic, associate professor of economics at Mercer University, said to the crowd of about 300.
One of the challenges facing many businesses -- in Middle Georgia and elsewhere -- is attracting businesses and qualified workers to the region, Tomic said. However, with all the institutions of higher education available here, the ability to train workers is not a problem.
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“We can train anybody from the top of the skill level to the bottom of the skill level,” he said. “But to do that we need to hear from you. ... We need to understand your needs. ... We also need to communicate and provide meaningful work experiences for students while they are in school.”
Tomic based most of his remarks on the results of an economic outlook survey conducted Dec. 8-22. The Stetson School of Business and Economics at Mercer sent 2,681 requests to take the survey to a variety of businesses in the midstate, and 220 responded -- or about 8 percent. An additional 68 responses were obtained from emails from the Greater Macon Chamber of Commerce and the Forsyth-Monroe County Chamber of Commerce. A majority of the responses came from Bibb County, followed by Houston, Monroe and Baldwin counties.
While businesses were encouraged by the economy overall, some have faced a few barriers to improving their bottom line.
“When it comes to obstacles that businesses faced in 2014, government regulation and red tape leads by leaps and bounds,” Tomic said. “It is most often ranked as the No. 1 obstacle, and it is the most ranked of all the obstacles.”
Companies expect to hire in 2015, and 38 percent of respondents said that next year is likely or very likely to be a good time to expand their businesses in Middle Georgia, while 36 percent said it is unlikely or very unlikely, according to the results of the survey.
“We see cautious optimism for 2015,” he said. “Businesses in Bibb and Houston (counties) were the most optimistic” in the midstate, according to the survey results.
A little more than 50 percent of the respondents in Bibb County expect to hire full-time workers in 2015, and more than 20 percent plan to hire part-time workers, according to the survey. Of all responses, more than 40 percent plan to hire full-time workers and nearly 30 percent plan to hire part-time workers this year. Thirty percent said they do not plan to hire more people this year.
Tomic said he is encouraged by the growth of economic development in Middle Georgia, and once workers are educated and trained, the community should help persuade them to stay and work.
“There are exciting community improvement initiatives underway that I have not seen in my 10 years in the region,” he said.
STATE OUTLOOK IS GOOD
Benjamin Ayers, dean of the University of Georgia’s Terry College of Business, presented a look at the state’s economic position.
“I am pleased to announce that the prospects for Georgia’s economy are good,” Ayers said. “The pace of Georgia’s economic growth will be faster in 2015. In fact, Georgia’s economy will grow faster than the country as a whole for the second straight year.”
Georgia’s unemployment rate is expected to decrease by a full percentage point from its current rate of 7.2 percent by this time next year, Ayers said.
“Although it will be more difficult to find workers, wages will rise slowly,” he said. “There are absolutely no signs of runaway inflation.”
Some economic sectors will see positive, but somewhat slower, growth this year.
“The turnaround in real estate and more favorable demographic trends will help Georgia’s financial institutions,” Ayers said. “However, the costs associated with regulatory compliance as well as less mortgage refinancing ... will limit job growth in the financial activities sector.
One of the top reasons for optimism about Georgia’s economic growth is due to a “renaissance in manufacturing activity,” he said. This is notable because the state lost four out of every 10 manufacturing jobs it had in the past decade.
“However, in the last three years, we saw many manufacturing projects announced in the aircraft, automobile, construction equipment, life sciences and flooring industries,” he said.
Low domestic natural gas prices and rising production costs in China, along with concerns about product quality, intellectual property rights and managing risks, will help the state win more manufacturing projects this year, Ayers said.
He agreed with Tomic that the state needs to develop a “much better educated and more highly skilled workforce,” especially when recruiting life sciences companies.
Another reason for optimism this year is “the renaissance in construction and real estate development,” Ayers said.
“Increasing demand for housing spurs activity in manufacturing building materials and transportation of those materials,” he said. “Increased demand for housing will come mostly from job growth.”
The recent drop in fuel prices should boost Georgia’s economy more than the nation’s economy because the state is a major transportation and logistics center that is fuel intensive. And since Georgia is not an oil-producing state “there is literally no downside to low oil prices,” he said.
There are some factors that could curb Georgia’s rate of economic growth, he said. One example affects entrepreneurs who typically use their home as collateral to borrow money to get started or expand their business. They likely will not see the home equity needed to get a loan. At the same time, banks are restricting “relationship-based lending” to small businesses.
But “for the first time since the Great Recession, Terry College forecasts a rate of economic growth that exceeds Georgia’s long-run average rate of growth,” Ayers said. “We will outperform the average state in 2015.”
To contact writer Linda S. Morris, call 744-4223.