As the year comes to a close, the looking ahead continues – this time, it’s from UGA’s Selig Center for Economic Growth. The Selig Center will conduct a tour around the state in January and early February to discuss the different regional foci but the kickoff event began in Atlanta on Friday.
Speakers included UGA President Jere Morehead, Terry College Dean Benjamin Ayers and Mark Vitner, Managing Director and Senior Economist at Wells Fargo. Ayers, the Dean and Earl Davis Chair in Taxation, confirmed the economic recession is over. Georgia’s recovery continues and a good 2016 is being predicted the Selig Center. According to Ayers, Georgia will continue to benefit from an improved housing market, state economic development legislation and an inflow of talent. However, financial markets, government restructuring and Federal fiscal austerity will continue to be troublesome lags.
Ayers offered three reasons for optimism in Georgia in 2016. “What accounts for our optimism? First, Georgia has a large number of major projects in its development pipeline. Second, Georgia’s economy will get more leverage from the housing recovery than the national economy. Third, Georgia will see much faster population growth than the nation. Finally, continued low oil and gas prices are much better for Georgia’s economy than for the U.S. economy,” said Ayers. He said Georgians can look forward to a rise in personal income of 5.7%, along with a state GDP increase of 3.3%.
Jeff Humphreys, the Director of the Selig Center, wrote the Georgia Outlook and reports that although Georgia’s economy will continue to expand, the “pace of job growth will slow significantly.” As the Federal Reserve’s action on raising interest rates looms large over any economic predictors, Humphrey’s notes that the risk of another recession is low (25 percent) but that the primary risk factors are mistakes in fiscal and/or monetary policies. A greater than expected slowdown in China, shifts in asset prices or general financial panic are also risks that could lead to recession.
Economic development, a frequent target in the political world, got high praise from the Selig Center report. Calling it a “tailwind to Georgia’s economic growth,” the report noted that the relocation and expansion projects thanks to economic development will be good for Georgia’s economy for next year and beyond since it typically takes multiple years to complete a project. The report cites examples such as Baxter International’s new facility in Covington with 1,500 jobs, GM’s IT innovation center that is bringing 1,000 jobs, multiple floor covering manufacturers expanding up to 3,00 jobs, 1,400 new jobs at Caterpillar’s Athens facility and Ernst & Young’s 400 high-tech jobs global IT center in Alpharetta.
The report also notes the increasing presence of automobile manufacturing in the Southeast, and Georgia specifically, as it is in the “sweet spot” in the middle of the Southern Auto Corridor, near major assembly plants, suppliers, interstates, ports and rail. Volkswagen’s plant in Chattanooga and Volvo’s plant in Charleston may not be in Georgia but they make Georgia an attractive site for parts suppliers.
The report also makes note that Georgia “must adjust its priorities to emphasize educational achievement. This will be critical in terms of improving Georgia’s competitiveness, which ultimately determines Georgians’ standard of living.” This in particular may be front of mind as legislators convene in January. The Opportunity School District legislation is on the ballot already for 2016 but recent comments from the president of the Georgia Federation of Teachers around charter schools show that education continues to be a hot button issue.
To register to attend the Selig Center tour events around Georgia, see here: http://www.terry.uga.edu/events/economic-outlook
