ATLANTA–Georgia’s employment grew by 85,500 jobs in calendar year 2017 (January to December), a sharp moderation from the gain of 120,600 jobs in calendar year 2016.
“The question going forward is will this moderation continue or will the positive national and international developments arrest this moderation trend?” said Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business.
“Compared to the nation, there are more peaks and valleys in monthly job numbers, but a clear downward trend can be seen since the state’s job growth rate peaked in the first quarter of 2015. This trend also is evident in neighboring and competitive states like Tennessee, Florida and North Carolina,” Dhawan wrote in his quarterly “Forecast of Georgia and Atlanta,” released Feb. 28, 2018.
Georgia’s employment growth in the fourth quarter of 2017 was better than the national number.
In 2017, small businesses were buoyed by good consumer spending, while large corporations benefitted from strong stock market gains of almost 20 percent in the Standard & Poor’s 500 index. Going forward, recent tax cuts (reforms) also benefit consumers and businesses alike. Specifically, small business and domestically demand-driven sectors in the state will remained buoyed by better consumer spending.
“Global growth recovery is evident in Georgia’s exports, which rose in 2017,” Dhawan said. “Exports to Canada, Mexico and China, the state’s largest trading partners, improved substantially last year.”
Increased trade at the state’s largest port in Savannah led to increased job growth in Savannah. Augusta and Athens also saw substantial increases in job growth.
In metro Atlanta, the construction sector saw a sharp moderation in job growth, which Dhawan attributed to the combination of a slowdown in multifamily activity and the completion of SunTrust Park and Mercedes-Benz Stadium.
“Residential housing permits trended lower in 2017 due to a 38.4 percent drop in multifamily housing permits, a trend we expect to continue until 2019,” Dhawan said.
Moderation in the catalyst sector of manufacturing, due to the strong dollar and global economic weakness with trading partners in the Middle East, Latin America and China, has had a trickle-down effect on other sectors, such as hospitality and retail trade, hitting Dalton and Columbus particularly hard, he said.
Dhawan predicts manufacturing will improve in 2018 as the dollar is predicted to weaken this year.
The sustained stock market bull run and corporate tax reforms will continue to support growth in the metro region and Georgia’s large corporate and financial activities sector. Dhawan believes that capital spending will improve in these sectors and aid in job creation.
“These positive factors, domestic and international in scope, will help mitigate the moderating rate of growth in job creation we saw in the last 18 months,” said Dhawan. “We predict a weakening of this moderating trend in job growth, which is the best we can hope for this late in the business cycle.”
Highlights from the Economic Forecasting Center’s Report for Georgia and Atlanta
- Georgia employment will add 76,200 jobs (17,600 premium jobs) in 2018, 64,200 jobs (15,100 premium) in 2019 and 58,900 (13,600 premium) in 2020.
- Nominal personal income will grow 4.1 percent in 2018, 5.3 percent in 2019 and 5.6 percent in 2020.
- Atlanta will add 58,100 jobs (13,100 premium jobs) in 2018, 48,900 jobs (11,700 premium) in 2019 and 43,600 jobs (10,100 premium) in 2020.
- Atlanta permitting activity in 2018 will increase 1.2 percent, increase 2.1 percent in 2019 and 4.0 percent in 2020.