ATLANTA – The state’s economic outlook is the healthiest it has been in a long time and things are looking better in 2014, according to Rajeev Dhawan, director of Georgia State University’s Economic Forecasting Center.
The factors needed for healthy economic growth are falling into place, Dhawan said Nov. 22 at GSU’s quarterly forecast.
“We could be poised for a takeoff in growth,” said Dhawan.
Georgia’s employment growth rate in August was better than the nation’s, and the center’s forecast calls for the state to create 85,000 jobs this year compared to 63,000 in 2012. Next year, job creation will top 78,000, but an increasing share of them will be higher-paying white collar jobs.
Overall however, jobs created in the state have not been much to crow about.
“The quality of the jobs gained, as measured by personal income or wage growth, has been less than stellar,” Dhawan said.
Georgia’s unemployment rate will wind up averaging 8.5 percent this year, the lowest in six years. It will decline to 8.2 next year and fall to 7.3 in 2015.
Sectors such as professional and business services, transportation and hospitality have regained all the jobs lost during the recession.
Education and health care have been mainstay industries. They have been adding jobs while other Georgia sectors were hemorrhaging jobs.
Some industries are still trying to recover – manufacturing, finance, information, wholesale and retail trade. State and local governments have been shedding jobs too as budgets have been tightened.
Local governments – including school boards – are experiencing the crush of the recession due to declines in property values. Many governments have nearly depleted reserves. But Dhawan predicts a new wave of investment that is improving property values and giving the construction industry a much needed boost.
Overall, the state and national economies could launch skyward if some potential hurdles don’t get in the way.
Should there be another federal budget standoff that results in a new government shutdown, that would dampen consumer and corporate confidence, Dhawan said.
Plus, what he calls “global malaise” has the potential to depress exports, which would weaken U.S. manufacturing, business investment and job creation.
Still Dhawan is optimistic about 2015, calling for gross domestic product to ratchet up to 3.0 percent after 2014’s 2.0 percent repeat of this year.
“A new Congress will be a factor in that change, ushering in the possibility of less partisanship and bickering,” Dhawan said. “Such a shift will allow free investment to take off and, in turn, produce good job and income growth in 2015.”