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Georgia economic growth will continue for 2013

EDITORS NOTE: This is the third of a three-part series on the economic forecast from the University of Georgia’s Terry College of Business.

ALBANY, Ga. — If Georgia wants to remain competitive for new businesses with other states and with countries overseas, it will have to get a grip on education, officials from the University of Georgia's Terry College of Business said this week.

Speaking at a luncheon on the 2013 economic forecast, Terry College Dean Robert Sumichrast put it bluntly for the business, civic and political leaders in attendance:

"The single largest challenge to Georgia's competitiveness on a regional, national and global level is a lack of K-12 education," Sumichrast said.

According to Sumichrast, only 65 percent of incoming ninth-graders in Georgia will graduate high school within four years. The national average is 75 percent, and the average in the European Union in 85 percent.

In Georgia, eighth-graders rank 35th in the nation in math scores and 27th in the nation in reading scores.

"The challenge for Georgia isn't that we aren't improving our scores," Sumichrast said, "it's that the rest of the country is improving faster."

On the whole, Sumichrast and his colleagues predict that Georgia will see slow but steady growth in most economic sectors in 2013, save one: government jobs.

Because of looming cuts at the federal level, coupled with stagnant property tax revenues at the local level, government jobs will likely be slashed over the course of the next year, Sumichrast said.

Industries in the leisure and hospitality sector, health care, and technology and manufacturing should see positive growth in Georgia in 2013.

The price of single-family homes will continue to rise in most areas of the state after bottoming out during the recession, but in Albany prices will remain low for another two years.

Sumichrast said that, despite improvements, as many as one-third of all Georgia homeowners remain upside-down on their mortgages. The predictions are all based on what he called key assumptions about the economy and Washington.

Chief among them is that leaders in Washington won't let the country run off the so-called "fiscal cliff," a move Sumichrast called "inconceivable."

The group is also assuming that the European Central Bank will continue to muddle through a lingering recession and that Greece and only Greece will exit the eurozone.

Finally, the group is assuming that oil won't top $100 per barrel in 2013 and that oil imports will decline as a percentage of gross domestic product thanks to increased domestic oil production in South Dakota.

Should oil rise, Sumichrast and his colleagues believe it would take oil hitting $140 per barrel to trigger another recession.