Forecaster: Corporate Sector Bounce-Back Leads Georgia Job Growth
Georgia’s job additions in the third quarter nearly equaled the total job additions in the first half of 2018, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business.
“In the first six months of 2018, the Peach State saw job gains of 35,600, just slightly above the same period last year,” Dhawan wrote in his quarterly “Forecast of Georgia and Atlanta” released on Nov. 14. “However, in the third quarter alone, employment increased by 35,900 jobs due to the return of corporate job creation.”
State job creation in high-paying sectors, such as corporate, wholesale, transportation and information, moderated sharply in the first half of 2018, posting a decline of 2,300 jobs. This was in stark contrast to strong job creation in domestic demand-driven sectors, such as retail trade and hospitality (among others), which gained 38,000 jobs, Dhawan said.
High-paying jobs, especially in corporate and information, came roaring back in the third quarter. Dhawan indicated that nearly one-third of jobs added in the third quarter were corporate, driven by a rebound in support and administrative positions which compose 50 percent of jobs in the sector.
“Georgia’s fall in corporate job additions in the first half of 2018 and subsequent third-quarter recovery was not seen nationally or in neighboring state,” he said. “This makes us suspect an anomaly in employment data, which sometimes happens since these numbers are based on statistical inference of a sample. We confirmed our suspicion by checking state revenue data which showed no evidence of high paying job losses. Thus, the underlying trend of the economy is healthy.”
Closely linked to the corporate sector, the information sector experienced a first-half decrease in jobs, followed by a sharp rebound in the third quarter. The healthcare sector also saw good gains.
Dhawan cited healthcare facility expansions for Children’s Healthcare of Atlanta in Druid Hills and Piedmont Hospital’s heart and vascular center in the metro area as examples. Facility expansions elsewhere in the state include Southeast Georgia Health System in Brunswick, Habersham Medical Center in north Georgia and Tanner Health System in south Georgia.
These projects and the rebound of multifamily housing permits have led to a substantial gain in construction jobs statewide. Strong sales and property tax collections have also resulted in city and county-level job gains in the government sector.
Despite these positive trends, Dhawan does not expect job growth to continue at this pace for Georgia.
“The job creation bump in the third quarter was a rebound from job losses in the first half of the year,” Dhawan wrote. “Therefore, we expect job creation going forward to revert back to its long-term moderation trend as the business cycle is maturing, evident also in the moderating business investment growth at the national level.”
The forecaster said the third quarter was not all good news for Georgia. Hurricane Michael’s damage to south Georgia cotton, pecan and peanut crops was an estimated $1.2 billion, with another $1 billion in destroyed timber resources.
Highlights from the Economic Forecasting Center’s Report for Georgia and Atlanta
- Georgia employment will add 90,600 jobs (15,000 premium jobs) in 2018, 68,900 jobs (13,900 premium) in 2019 and 55,500 (11,500 premium) in 2020.
- Nominal personal income will increase 4.1 percent in 2018, 4.7 percent in 2019 and 5.0 percent in 2020.
- Atlanta will add 63,000 jobs (10,800 premium jobs) in 2018, 46,900 jobs (9,600 premium) in 2019 and 38,100 jobs (8,700 premium) in 2020.
- Atlanta housing permit activity in 2018 will increase 10.8 percent, fall 3.8 percent in 2019 and increase 0.4 percent in 2020.