Caterpillar, which has a dealership on South Slappey Boulevard in Albany, is expected to create 1,400 jobs in Athens this year. (Outlook 2013)
ALBANY, Ga. — Georgia’s economic growth is on track to outpace the national average in 2013. That was the message delivered by Robert T. Sumichrast, dean of UGA’s Terry College of Business, at the Georgia Economic Outlook series.
“There are two main reasons for Georgia’s improvement relative to the country,” Sumichrast said. “First, the massive restructuring of the state’s private sector is now complete. Our real estate bubble is in the past. The second reason is the opening of several large relocation and expansion projects, which will provide a tailwind to Georgia’s economic growth.”
According to the forecast, prepared by the Selig Center for Economic Growth, the state’s GDP will rise by 2.1 percent—better than years past but still modest. Comparatively, the national economy will grow by 1.8 percent.
The resurgence comes courtesy of some smart policy decisions, and will be buoyed by a rise in single-family home buying, Sumichrast said.
Businesses like Caterpillar Inc. and Baxter International are expanding into Georgia, which will help the state add a predicted 53,000 jobs in 2013. In addition, population growth, a regular driver of economic growth, will increase to 1.3 percent—just above the national figure of 0.9 percent.
“Due to cost, logistics and tax advantages, Georgia remains very competitive with other states when it comes to landing economic development projects,” Sumichrast said. “These advantages are beginning to bear fruit. That’s partially because Georgia made several strategic shifts in its economic development strategy, including the creation of a $100 million deal-closing fund. Legislation passed in 2012 makes Georgia much more competitive, but our state will have to be aggressive in closing the right deals.
“We should target industries that expand the economic base and have good potential for long-term growth. We must invest strategically and grow clusters in areas such as bio- and nano-technology, and we should encourage innovation-based companies,” he said.
But it’s not all good news.
Georgia suffered disproportionate job losses during the great recession, and has recovered more slowly than the nation as a whole, Sumichrast said.
All the state’s new jobs will come from the private sector. The public sector will continue to lose jobs for the next 10 years as the state and local governments continue adjusting to doing more with less.
“The problem is not that we are doing worse. On many measures, we are doing better than we did in the past. The challenge is that our competition in both the developed and the developing world is improving faster than we are,” Sumichrast said. “A poorly educated workforce puts Georgia at a competitive disadvantage with other states and nations when it comes to recruiting companies. That problem is especially bad when it comes to high-paying, high-technology companies.”
In addition, Sumichrast cautioned that Georgia’s resources for attracting new jobs remain scarce, and must be used wisely.
“Georgia is making progress. It helps that the nation is continuing its economic recovery, even if it’s slow. It also helps that Georgia’s political leaders have enacted some changes to make the state more competitive,” Sumichrast added. “We will outperform the average state by a small margin in 2013. We need to expand the improvements of 2012 to other areas, such as education, to assure that our performance is once again among the best in the country.”