Findings presented by speakers at the Georgia Economic Outlook luncheon on Thursday, Jan. 19 painted a cautiously optimistic picture for the upcoming months and into next year.
Speakers predicted a brief recession and some turbulence in the housing market, alongside some stability in the labor force. This was the 40th University of Georgia Economic Outlook luncheon held at the Marriott Convention Center in downtown Augusta.
The luncheon’s two keynote speakers were Ben Ayers, dean of the University of Georgia Terry College of Business, who gave an overview of Georgia’s financial status in 2023; and Augusta Development Authority president Cal Wray, whose analysis focused on Augusta-Richmond County.
“We are expecting there will be some job losses in 2023,” said Ayers, who used data from research conducted by the Selig Center in his presentation. “The housing industry is going to be impacted the most. But the job market is still tight; [Georgia is] still below the full employment unemployment rate of 4%.”
Last year’s Economic Outlook foresaw Georgia’s recovery from the COVID-19, though more slowly than expected, Ayers said, due to the Federal Reserve’s shift in policy to contain “the highest inflation that we’ve seen in more than 40 years.”
MORE: Alison South Marketing Group acquired by Canadian firm
As such, post-pandemic expansion is expected to end by the second quarter of 2023, giving way to a “mild recession” of about six months, which is shorter than the average 10 months for post-World War II recessions.
Though recession seems likely, Georgia’s economy is poised to fare slightly better than the projected national average. Research foresees an increase of 0.2% in Georgia’s gross domestic product, compared to the national expectation of a 0.4% decline.
“Housing is the canary in the coal mine when it comes to recessions caused by Federal Reserve,” Ayers said, noting that higher interest rates will cause businesses to spend less on non-residential structures and inventory.
Consumer spending, which represents some 70% of the state’s GDP, is not anticipated to significantly add to or subtract from its growth. Moreover, government spending—particularly on intellectual property and software, will help grow GDP.
“And so, if you put it all together, Georgia’s GDP will be essentially flat this year,” Ayers said in his presentation. “Now, that’s not great, but relative to most recessions, that’s actually good news.”
In Augusta, however, the best news is regarding the job market, with a 12% job growth from 2012 to 2022 in the Augusta Metropolitan Statistical Area (which includes both Aiken and Augusta and surrounding counties).
Manufacturing, cyber technology, healthcare and professional services are significant industries in Augusta. Even amid the job increase, however, the labor force is dropping. Despite burgeoning increases in potential employment, only roughly 55% of the actual eligible labor force is participating.
MORE: Jones Creek clubhouse owner seeks rezoning for catering service
Wray, in his presentation, noted that roughly 2,700 people in the healthcare fields and approximately 6,000 in manufacturing are about to retire.
“How are we going to replace those employees?” Wray said. “What are the training programs? How are USC Aiken, Augusta Technical College, Aiken Tech, going to help backfill, or how do we recruit those people here to backfill those jobs, so we don’t have a drop off in manufacturing?”
With Augusta’s several development projects, such as Aurubis and Denkai America, underway, the CSRA is primed for a solid economic foundation, but Wray notes that the question of recruitment is still to be resolved.
“The entire market as a whole is good,” said Wray regarding how Augusta’s economy affects workers. “If you want to work there are jobs available, if you don’t have the skill set there are training programs in South Carolina and Georgia; and manufacturing or healthcare only continue to grow. If you work in those fields, there’s training available, and if you have those skill sets, you can have a job tomorrow.”
The Economic Outlook event is coordinated annually by the Selig Center of Economic Growth, a unit of the university’s Terry College of Business. The center hosts the event to present up-to-date economic assessments and forecasts at the national, state and local levels. The program travels to host the presentations in various cities in the state, including Atlanta, Macon and Albany.
Skyler Q. Andrews is a staff reporter covering business for The Augusta Press. Reach him at skyler@theaugustapress.com.
