Economist: Ga. strong, growing
Georgia’s economy is strong in the fourth quarter of 2017 and on pace to grow by more than 2 percent this year.
Roger Tutterow, an economics professor and the director of the Kennesaw State University’s Econometric Center, said this week the American economy is still expanding post-recession without any signs of slowing down.
“We’re on the cusp of the 100th month of expansion and we’ve been growing consistently,” Tutterow said. “And the most likely trajectory of this economy is continued growth through 2017 and well into 2018.”
Georgia’s economy ranks seventh in the nation when it comes to job creation, Tutterow said, in part because metro Atlanta’s economy is not dependent on any one business sector.
Tutterow said the U.S. workforce is estimated to be about 146 million people strong, and growing at a rate of about 185,000 jobs a month.
“There is nothing in output and nothing in employment that suggests this economy is significantly weakened,” he said. “This has been an incredibly long expansion.”
In its ninth year of expansion since the recession, America’s economy is not showing any signs of dwindling, Tutterow said.
“I don’t think just because we’ve been growing for eight years that we have to have a recession,” he said. “I think recessions come because of bad economic policy.”
Tutterow said volatility in the economy comes largely from two sectors: energy and food.
“But where you want to be is in a region of the country that is not dependent upon one sector,” he said. “What we want in Georgia, what we want in metro Atlanta and what we want in Cobb County is a diversified economy where we create jobs in a variety of sectors at a variety of compensations.”
Housing
With that variety of compensation, though, comes a variety of housing demands.
“For all the increases we’ve had in new construction and new home sales, we’re actually under-supplying single-family, detached housing in most of metro Atlanta,” he said, saying that the rise in the cost of lots in hot-market areas is also prompting developers to build homes that may not be affordable for everyone. “We could be chasing too much of our market into higher price points.”
Additionally, he said there hasn’t been much in the way of multi-family developments, though there is a trend among younger Americans to rent more apartments and live in multi-use developments.
“Historically, the multifamily market has been sensitive to the preferences of people in their 20s and 30s,” he said. “They want to go vertically. They want mixeduse — live, walk, shop — all right there.”
But the price points of some new developments springing up across Atlanta may be a bit pricey for a young professional who’s still got debt to pay off.
Overall, lending rates will remain low, he said, even if the Federal Reserve is eyeing another tax hike.
He assured those in the real estate and lending markets that any change would be gradual and there was nothing to lose sleep over. Much of metro Atlanta’s housing market is already back to pre-recession price points, he said, but appreciation is starting to a level where affordable housing becomes a major issue again.
Job creation
Tutterow also emphasized Georgia’s need for more manufacturing and agricultural jobs — saying the two industries have seen a shortfall of workers in recent years.
While the economies of Atlanta, Gainesville and the state’s coastal region continue to thrive, there are large pockets of the state that haven’t developed nearly as much economically, he said.
“We need to be honest about how we create wealth in our state,” he said. “The truth of the matter is the sector of the economy that gets a bad rap is manufacturing, but it’s still the sector of the economy that does the best for wealthcreation.”
Tutterow said manufacturing jobs account for the highest hourly compensation of any sector in the economy with the biggest “spillover” effects, or the production of goods that are transported outside the region.
“Workforce matters,” he said, referencing the economic development teams across the country working to attract the headquarters of large corporations.
But major companies like General Electric or Amazon don’t always head to cities that offer the lowest tax-rates or the best incentives.
Instead, they head to areas with better developed workforces, Tutterow said.
“Taxes matter, infrastructure matters, but workforce matters too,” he said. “We have to continue, as a state, to recommit ourselves to investing in the workforce for a variety of jobs.”
He praised the state’s technical education programs, saying many of the jobs sought out by these major corporations champion skills over college degrees.
“That preparation will remain one of the keys for Georgia to maintain its reputation as one of the best destinations for businesses,” Tutterow said.