ATLANTA, GA—More than 24,000 jobs were created across all regions of Georgia by economic development projects in Georgia during the first three quarters of fiscal year 2021, the Georgia Department of Economic Development (GDEcD) announced. These projects total over $8.43 billion in new investments, representing a 67% increase in new investments compared to the first nine months of the previous fiscal year. Likewise, job creation is up 49% over the same period during fiscal year 2020.
“Creating high-paying jobs for hardworking Georgians – no matter their zip code – has been a key priority of mine since day one,” said Governor Brian P. Kemp. “These numbers show that our continued, targeted investments in K-12 education, workforce development, and innovative partnerships are doing exactly what they’re supposed to – delivering opportunities to Georgians in every corner of the Peach State.”
During the third quarter of the fiscal year between January and March 2021, Georgia also further solidified its position as an internationally recognized tech hub and data center region with game-changing commitments from Airbnb, The Adecco Group, and Google. Microsoft also announced plans to build on their existing Georgia footprint to develop one of the company’s largest hubs in metro Atlanta. The company will also establish new data centers in Fulton and Douglas counties. Georgia’s significant fiscal year-to-date totals do not include complete details on the expected investments and job creation totals from Microsoft or Airbnb.
Georgia business expansions accounted for 68% of all projects and total investments as companies chose the state as the best locations for growth. New locations to the state accounted for 58% of new jobs in economic development projects from July 1, 2020, through March 31, 2021.
Food processing, manufacturing, and logistics and distribution industries in the state continued their robust pace of development, accounting for 63% of jobs created by economic development projects. Georgia’s automotive and information and technology industries also continued to flourish, accounting for nearly 5,000 new jobs generated three-quarters into the fiscal year.
A few examples of newly announced projects across the state include Freshly opening their first Southeastern U.S. facility in Cobb County, Sailfish Boats expanding in the southwest Georgia city of Cairo, and Feit Electric investing in their first East Coast distribution facility in McDonough. Brake pad supplier KB Autosys selected Meriwether County in west Georgia for their first U.S. automotive manufacturing facility, near customers in the region, such as Hyundai, Kia Motors Manufacturing Georgia, and General Motors.
“Georgia’s economy is diverse, promising, and continuing to gain momentum,” said GDEcD Commissioner Pat Wilson. “One year ago today, we faced an extremely volatile and uncertain economic future. I extend my thanks to all of our private and public sector partners for the incredible amount of resilience they have shown and for helping us maintain Georgia’s position as the No. 1 state to live, work, and raise a family.”
To view state announcements from the first three quarters of the fiscal year, visit www.georgia.org/newsroom.
The Georgia Department of Economic Development (GDEcD) is the state’s sales and marketing arm, the lead agency for attracting new business investment, encouraging the expansion of existing industry and small businesses, locating new markets for Georgia products, attracting tourists to Georgia, and promoting the state as a destination for arts and location for film, music and digital entertainment projects, as well as planning and mobilizing state resources for economic development. Visit www.georgia.org for more information.
ATLANTA–Georgia’s maturing business cycle and weakening job quality mean economic and geopolitical developments will have greater impact than when the growth path was accelerating between 2013 and 2017, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s Robinson College of Business.
“The two most important drags to growth are, mercifully, out of the picture in 2020. No tightening is expected by the Federal Reserve and there is a bipartisan agreement on federal spending. Additionally, the threat of ever-increasing tariffs on Chinese imports is off the table with the phase one deal signed last month,” Dhawan wrote in his “Forecast of Georgia and Atlanta,” released Feb. 26, 2020. “But Georgia’s catalyst sectors (manufacturing, technology and large firms with global operations) face other headwinds, namely global economic malaise and geopolitical developments.”
Dhawan characterized the quality of the 70,000 jobs Georgia added last year as “a bit of a disappointment. More jobs mean more paychecks, which fuel spending, resulting in the collection of sales tax at the cash register. But the purchasing power of these new jobs was weak. Georgia’s net sales tax collection growth of 2.7 percent in 2019 was woefully lower than the 5.6 percent growth in 2018.”
This happened even as the state added 46,500 jobs in the last six months of 2019. Looking at job additions by sector, 60 percent of those jobs were in just two sectors, hospitality and healthcare, accounting for about 25 percent of the employment base. These two sectors typically pay less than the high wages of the catalyst sectors. From 2014 to 2018, when growth was balanced, hospitality and healthcare accounted for 30 percent of job growth, closer to their share of the employment base.
“The seeds of future growth are not sown in these two service sectors,” wrote Dhawan. “Growth always begins in the catalyst sectors, especially those producing high paying jobs and creating demand for downstream services in these sectors.”
One catalyst sector, manufacturing, is dealing with trade headwinds and a weakened global economy, especially stagnation in Europe – a big buyer of Georgia machinery and industrial goods. As a result, the sector has gone from 8,400 job gains in 2018 to only 1,000 in 2019. A bright area in manufacturing is announcements that small manufacturing firms are hiring or setting up new plants.
“This shows that small manufacturing concerns that deal primarily with national demand are willing to risk expansion. Gainesville, which has a big cluster of these types of firms, grew 4.1 percent in 2019,” Dhawan wrote.
The forecaster is concerned about potential geopolitical developments – Middle East flare-ups causing oil price spikes, kinks in the trade deal with China, acting on past threats of tariffs on European auto imports, and COVID-19, the coronavirus that first appeared in late 2019 in Hubei province, China, which Dhawan said is the biggest “threat to the 2020 forecast.
“At present, the key issue for us is the spread of the virus outside China,” Dhawan said. “But, unlike a finite event, such as a hurricane or earthquake, the coronavirus is still playing out, making it hard to assess the economic impact from stoppage of Chinese factory production.”
“China is a vital part of the world’s supply chain for goods ranging from toys to iPhones. For these goods to be delivered to customers they first must arrive at our ports. Less production in China means less cargo arriving at U.S. ports, and subsequently less trucking and warehousing demand. This is a potential threat that one of our main engines of growth, the Port of Savannah, faces if the virus induced shutdown in China lasts until mid-April”.
Highlights from the Economic Forecasting Center’s Report for Georgia and Atlanta
- Georgia will add 54,400 jobs (9,800 premium jobs) in 2020, gain 47,400 jobs (8,700 premium) in 2021 and increase by 43,300 (7,900 premium) in 2022.
- Nominal personal income will grow 4.5 percent in 2020, 4.8 percent in 2021 and 4.7 percent in 2022.
- Atlanta will add 41,700 jobs (8,300 premium positions) in 2020, moderate to 34,400 jobs (7,000 premium) in 2021 and 28,500 jobs (5,900 premium) in 2022.
- Atlanta housing permitting activity will fall 6.1 percent in 2020, decline 2.6 percent in 2021 and fall another 0.9 percent in 2022.