Georgia outlook update
On February 22, the Economic Forecasting Center at Georgia State University's J. Mack Robinson College of Business held its first quarterly conference focusing on the outlook for the local, state, and national economies.
According to GSU's forecast, the ongoing fiscal and financial challenges in Europe, rising energy prices, cautious U.S. consumers, and weak corporate confidence are the headwinds that Georgia's economy will face in 2012 and 2013. Rajeev Dhawan, director of GSU's Economic Forecasting Center in the Robinson College, reported that gains in growing sectors—such as professional and business services, manufacturing, and healthcare services—have not been great enough to offset losses in lagging sectors such as construction, local government, and banking.
Here are some highlights from the GSU Economic Forecasting Center's report for Georgia and Atlanta:
- Georgia will add 14,300 jobs, including 2,500 premium jobs, in calendar year 2012. Employment levels will improve in 2013, when the state will add 40,600 jobs, of which 7,200 are premium jobs (resulting in a 0.8 percent annual growth rate). In 2014, the recovery will be better but still moderate, with the economy adding 66,700 jobs, 14,100 of which will be premium jobs (a 1.5 percent annual growth rate).
- Georgia's unemployment rate will be 9.7 percent in 2012, only 0.3 basis points lower than 2011 levels. In 2013, unemployment will decline to 9.3 percent. In 2014, it will decline again significantly, to 8.5 percent.
- Atlanta employment will mirror statewide conditions for calendar year 2012, with 10,300 job gains (2,900 premium jobs). Employment will grow in 2013, with the Atlanta economy adding 28,700 jobs (5,200 premium jobs). Atlanta employment will increase again in 2014 by 44,800 jobs (9,600 premium jobs).
- Atlanta housing permits will increase by 12.6 percent in 2012 to 9,594 units as a result of a boost in multifamily housing permits (28.9 percent). Single-family permits will post a mild increase of 5.9 percent this year. Permit activity will increase by 17.1 percent in 2013, with single-family and multifamily housing activity posting increases of 11.7 percent and 27.8 percent, respectively. Permit activity will grow again in 2014, posting an overall increase of 22.4 percent, with multifamily permits growing at 31.6 percent.
In a recent speech, Atlanta Fed President Dennis Lockhart noted that he anticipates steady, moderate growth in the absence of potential shocks, a view similar to Dr. Dhawan's outlook for the state.
By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department
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