The pace of job growth in Georgia will slow slightly next year, but the state will outperform the nation, according to the annual economic outlook from the Terry College of Business at the University of Georgia.
The state’s payrolls will expand by 2.4 percent – about 96,600 positions – as the Georgia economy reaps rewards from new projects, population growth, housing’s resurgence and low energy prices, said Benjamin Ayers, dean of the business school.
“We think 2016 looks very promising,” he said, speaking to about 700 attendees in downtown Atlanta. It was the first in a series of presentations he will make across the state detailing the report.
Unemployment will continue to fall – though more slowly than it has this year, he said. Jobs in construction and the corporate sectors especially will surge, Ayers said. “So we are going to out-perform the nation as a whole.”
The mix of jobs should tilt toward better paying positions, he said: Personal income in Georgia should rise 5.7 percent – significantly faster than growth of the state’s economy as a whole.
“Wages will accelerate,” he said.
A marginally less rosy view came several weeks ago from the Georgia State Economic Forecasting Center. The center’s director Rajeev Dhawan, forecast 1.8 percent growth in jobs as well as slightly weaker income growth and a slightly higher unemployment rate.
Both analyses see metro Atlanta as the state’s leading engine of growth: the region will add 69,600 jobs to account for 75 percent of Georgia’s growth next year, the Terry report said.
Housing – especially crucial in the metro Atlanta economy – will have a very good year, Ayers said.
Housing starts in Georgia will jump 23 percent while prices will rise 5 percent, he said. “The lowest-priced houses will increase the fastest.”
Not that good news is guaranteed: “There are risk factors,” Ayers said.
Cutbacks in federal spending could hurt Georgia – mainly the trimming of budgets and workforces at big military bases.
And for the state’s long-term economic potential and the hope of higher standards of living, the inability to boost the performance of primary schools is a problem, Ayers said. “We need to put greater emphasis on education.”
Expected increases in interest rates are also “a headwind,” he said.
Mark Vitner, senior economist at Wells Fargo, said the Federal Reserve’s expected move to start lifting rates next week is long overdue – and he thinks the economy can handle the higher rates.
Yet the hike comes at a troubling moment, he said.
Investors of late have been shifting more to lower-risk bonds, a sign of worry, he said. “That means that people are getting nervous… In the past, that has been a sure sign that the economy was going to go into recession in the next 12 months.”
And while the U.S. economy seems generally strong, there are broader signs of trouble from overseas, he said.
“There’s no other way to say it. The global economy is a mess.”
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