Georgia’s economy will grow a little faster in the coming year, although the state still won’t regain all of the jobs lost in the Great Recession and housing bust, according to the University of Georgia’s annual economic forecast.
Unemployment will dip slowly through 2014 as the state’s economy adds about 74,200 jobs – the lion’s share of them in metro Atlanta, said Charles Knapp, interim dean of UGA’s Terry College of Business.
“In 2014, Georgia will continue to recover from the Great Recession,” he said. “The pace will be modest, but faster than in 2013.”
His remarks came during the college’s annual economic conference Wednesday, featuring a forecast prepared by the Selig Center for Economic Growth. It calls for the state economy to expand 3 percent, compared to about 2.3 percent this year.
That prediction is a bit rosier than that of the Georgia State University Economic Forecasting Center, which sees 2.7 percent growth. GSU expects the state to add 77,700 jobs.
Knapp cautioned that Georgia’s public education system is an obstacle to faster growth. He cited figures showing that 8th graders in Georgia rank 40th among the states in math, 34th in reading, 31st in science, and 27th in writing.
He said education and skills will drive productivity, innovation and ultimately in a “flat” global economy — that is, one in which all nations are in competition.
“In a global economy that is flat, the failure to educate our children results in a fall in our standard of living,” Knapp said. “The challenge we have is immense.”
Gov. Nathan Deal spoke at the conference and cited recent job creation moves, such as renewed expansion in northwest Georgia’s carpet country, as among the best indicators of Georgia’s economic outlook.
“We think by that test we are doing very well considering the economic times that we live in,” he said.
He credited economic development initiatives – such as a beefed-up deal-closing fund and the phase-out of the sales tax for energy used in manufacturing – as leading the revival.
“We think they are paying off, and we certainly are seeing a resurgence in manufacturing in Georgia,” he told the AJC after the event.
John Silvia, chief economist for Wells Fargo Securities, delivered the national outlook at the conference. He said the U.S. economy will continue to grow more sluggishly than after previous recessions.
Consumer spending for years was fueled by surging home prices that permitted owners to refinance repeatedly – but the burst of the real estate bubble virtually ended that.
“You can’t use your house as a piggy bank,” Silvia said.
Georgia’s housing sector is on the rise again.
That boosts the outlook for the state’s private sector, with jobs being added next year in a number of sectors, especially construction, business services, education and health services and information technology, as well as leisure and hospitality, according to the Terry College projection.
The public sector will pull in the opposite direction – mostly because the federal government will trim defense spending, Knapp said. “That public sector restructuring will be the strongest remaining headwind. The restructuring of the public sector is a work in progress.”
Georgia will grow slightly faster than the nation overall, thanks to the resurgent housing market as well as aggressive marketing of the state to companies looking for places to expand or resettle, Knapp said.
The state lost 340,000 in the recession that started in late 2007 – proportionally, a much worse pounding than all but a handful of states. At the projected rate of growth, Georgia will not recoup those job losses until 2015, Knapp said.