Forecast: Strong Domestic Demand Mollifies Trade Skirmish Sting in Georgia
By Rajeev Dhawan
Consistent with trends at the national level, March benchmarking revisions upgraded Georgia’s employment gains from 102,100 job additions to 120,600 in calendar year 2016.
Thus, employment grew by 2.8 percent, a maintenance of the job growth pace since 2014.
Employment in domestically demand-driven sectors was revised strongly upwards, while employment in globally connected sectors also was revised up, but to a lesser extent. This will have implications for future purchasing power, as jobs in domestically demand-driven sectors such as hospitality, education, construction and government are typically lower paying, while globally influenced sectors such as large corporations and manufacturing are higher paying.
Manufacturing employment creation has decelerated over the past few years, likely because of the strong U.S. dollar. Georgia’s exports also are falling.
An increase in corporate jobs due to the large contingent of headquarters in the state has generated demand for housing, which has resulted in a surge of multifamily permitting. Construction activity also was boosted by the hospitality sector.
Thirteen hotel projects are in the pipeline, bringing the number of rooms in the city over 97,000 by 2020. Atlanta’s occupancy rate of 73 percent in 2016 was one of the highest levels in recent history.
In the corporate sector, the lowest wage earners saw stronger growth than those in technical or management positions. The real issue is what the purchasing power of the jobs created will turn out to be.
Beyond Atlanta, a decrease in tonnage movement at the port of Savannah led to a downward revision for the metropolitan statistical area (MSA). Athens, Albany, Gainesville and Macon also had jobs numbers revised downward. The Columbus MSA was revised downward near zero.
MSAs outside metro Atlanta will be more immune to President Donald Trump’s trade actions than Atlanta with its globally connected economy. However, Trump’s other administrative initiatives will provide a boost to small business activity and buoy overall growth.