Innovations Drive Georgia Economy toward Normal, Wild Cards Notwithstanding
Seventy percent of Georgia’s employment and income are generated in the Atlanta metro area, which “took a huge hit from the 2020 Covid-19 shutdown by devastating the bread and butter of the city’s economy: its convention and meetings business,” said Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s Robinson College of Business.
“Two decent months of job growth will bring the Peach State back to pre-pandemic (Feb. 2020) employment levels. Eighty percent of the economy, representing all but two sectors, has essentially recovered, with corporate jobs running 32,000 above Feb. 2020 levels,” Dhawan said today (Feb. 23) when he delivered his economic forecast for Atlanta and the state of Georgia.
“But the two lagging sectors (leisure and hospitality, along with state and local government) that make up 20 percent of the state’s employment base are currently 75,000 jobs below pre-pandemic levels.” Dhawan said today (Feb. 23) when he delivered his economic forecast for 2022 and beyond.
Although corporate job growth has rebounded, Dhawan noted that office occupancy has not. “Workers are still not back in the offices due to high-rise hesitancy. News reports and leasing actions by employers point to a future of workspaces that are low-rise, low-density complexes near housing that is appealing to their workforce,” Dhawan said. “We’re seeing this increasingly in suburban locations, such as Alpharetta and other cities in North Fulton bordering Forsyth and Cherokee counties. This dovetails with the trend of technology companies moving to suburban locations and low-slung office developments along the BeltLine to be near their employees.”
The state’s film and television industry continues to expand in the greater Atlanta area. Electric Owl Studios announced plans to build the “greenest movie studio on earth” near MARTA’s Indian Creek station. Cinelease Studios announced it will expand its Georgia operations with new sound-stage and office space in Covington. And in Doraville, Gray Television is building out a large portion of the land once occupied by a General Motors (GM) plant for a massive mixed-use operation comprising film production, housing, and retail businesses.
“This is an innovative use of the former GM property. The sellers had struggled to strike a deal for traditional redevelopment, and now it can become a blueprint for converting industrial properties for modern use,” Dhawan said.
At least seven companies have announced investments or expansions in North Georgia over the past year, bringing jobs to Banks (PNK Group), Floyd (Integrated Fiber Solutions), Hall (Cottrell), Hart (Titan Steel Door), Jackson (5K Innovation, Duckyang), and Walker (Roper Corporation) counties.
Manufacturing is moving beyond its traditional strongholds in Southwest and Northeast Georgia to counties that abut the metro Atlanta core to offer high-tech services, distribution and warehousing, and electric vehicle (EV) technology.
“Two wild cards loom. First is the possibility of Russia entering Ukraine, which would send oil prices from around $90 per barrel to north of $100 per barrel,” said Dhawan. “Russia produces 10 percent of the world’s oil, and any sanctions would mean rising gas prices. Pain at the pump would be accompanied by drops in retail sales, dining out, personal travel, and more. Atlanta’s largest employer, Delta Air Lines, would also take a hit.”
The other wild card, according to Dhawan, remains the potential for new Covid-19 variants. “Georgia’s hospitality sector still needs to recover 53,000 jobs to be at 2020 levels. Based on experience with the past variant waves, this sector had to take a step back. We can expect a setback to progress if a severe variant presents again.”
Highlights from Rajeev Dhawan’s Economic Forecast for Atlanta and Georgia
- Georgia will add 107,500 jobs (29,500 premium jobs) in 2022, gain a respectable 81,600 jobs (21,900 premium) in 2023 and increase by 71,700 (19,100 premium) in 2022.
- Nominal personal income will grow 7.8 percent in 2021, pull back to only 1.3 percent growth in 2022 and rise 5.3 percent in 2023.
- Atlanta will add 77,900 jobs (22,100 premium positions) in 2022, grow by 58,100 jobs (15,900 premium) in 2023 and add 54,400 jobs (14,800 premium) in 2024.
- Atlanta housing permitting activity will decrease by 3.4 percent in 2022, decline again by 5.5 percent in 2023 and drop by 2.7 percent in 2024.
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