The economic gurus from the Terry College of Business at the University of Georgia’s Selig Center for Economic Growth and the Center for Economic Analysis at Middle Georgia State University gave attendees at the Georgia Economic Outlook luncheon a peek into the future, statewide and locally. And in the words of Benjamin Ayers, dean of the College of Business, he had “good” news to report.
On the national level, things aren’t perfect, but are looking better than 2016. Dr. Ayers, quoting from the report said, “The 2.5 percent rate of 2017 GDP growth will be higher than last year’s 1.7 percent, but below the 2.9 percent average of the last 50 years.” He explained that consumers and businesses are expected to spend more; consumers will spend on housing raising that sectors prospects and businesses on equipment and buildings.
The good news for Georgia is that our state’s GDP is looking better than the national average at 3.2 percent, and for all intent, with an unemployment rate below 5 percent, which is considered full employment.
Ayers says the state is looking at a “manufacturing renaissance” and pointed to Georgia being ranked the No. 1 state for doing business by consultants for the fourth consecutive year. But — yes, when economists speak, there is always a “but.” The report warns: “Because Georgia’s economy is inextricably linked to the national economy, the risk of another recession is 35 percent, up from only 25 percent last year. The primary risks likely to trigger a new recession are massive shifts in asset prices (e.g., equities and/or bonds), mistakes in fiscal and/or monetary policies, a much sharper than expected slowdown in China, or a widespread financial panic due to turmoil in the credit markets.”
What’s going to drive Georgia’s economy? There are several aspects according to the Selig report. Georgia is blessed to have transportation infrastructure — from Hartsfield-Jackson International Airport to the Port of Savannah. From Hartsfield where almost any location in the world is accessible, to goods delivered to the port that can reach most of the United States in a matter of a few days. And the report bears out that Georgia is at very low risk for business disruption due to natural disasters according to FEMA making the state ideal for businesses to locate, not only production facilities, but headquarters.
Other business sectors to watch are the film industry where Georgia is ranked No. 3 behind California and New York in TV and movie production and already contributes $7 billion to the state’s economy annually. Information Technology, Health care and manufacturing are expected to grow.
The report expects the Macon MSA employment to rise by 1.8 percent in 2017, or by 1,900 jobs, and the report names, names of companies planning to add jobs:
▪ First Quality Packaging Solutions
▪ Kumho Tire
And the report states, “Macon’s role as a regional retail trade center will expand in 2017. Its central location makes the area a good place to host statewide meetings or conventions, but the region has yet to fully develop this advantage. ... One potential long-term problem for Macon is that the number of young adults and middle-aged adults is declining.”
In that single paragraph is validation and a challenge. Validation that the decisions to increase the number of hotel and motel beds in the area was a wise one, but that more growth in the hospitality sector, tourism, restaurants, etc., are necessary to take full advantage of our geographic blessing. Trying to hold onto young families and the millennials who grow up here and those who come here for college is a never-ending challenge, one we have to continue to focus on.
If there is a take away from this report it’s that we can’t take anything for granted. Though the stars seem to be aligned for Georgia to have a great year, there is still an air of uncertainty and that’s expressed with the increased chance — 35 percent — of a recession. That’s the one thing in this report no one wants to see come true.