ATLANTA- A double dose of winter storms froze Georgia’s economy in the first three months of the year, setting the stage for lukewarm growth for the rest of 2014, according to a forecast released Thursday by Georgia State University.
The university’s Economic Forecasting Center is predicting just 1.6 percent growth in the state’s employment by year end, noticeably slower than last year’s 2.0 percent and weaker than the 2.2 percent of the nation’s 2014 growth. For Savannah, job growth will best the state and nation at 2.5 percent.
Much of that growth will be fueled by the retail and hospitality sectors as well as construction due to the start of deepening the Savannah River, [filtered word] of the Atlanta Falcons stadium and a 70 percent rise in permits for home building.
“The state lost 9,000 jobs in the first two months of 2014, which of course include the ‘Snowpocalypse,’ but rebounded to a job gain of 15,000 in March when the storms subsided,” notes Rajeev Dhawan, director of the center. “Weather most likely played a role in the iffy job-growth numbers of the first quarter in the state.”
Savannah wound up 2013 with 4,240 new jobs and started this year by adding 1,640 during January, February and March. Much of the hiring came from leisure and hospitality for 640 jobs, professional/business services for 580 and transportation and utilities for 610. Plus, the port posted an all-time monthly record in March.
“The good news going forward is Savannah (River deepening) has finally been approved,” he said, adding that the economic impact won’t begin to be felt until 2015.
The announcement of hiring for Daniel Defense’s expansion and a hotel on River Street East are also reasons why he expects the Hostess City to surpass the state and national forecast.
Weighing down the overall economy are a European recession, military posturing by Russia and the rapidly slowing economy in China that ratcheted down exports.
Dhawan is expecting moderate inflation and interest rates. He figures public speculation about whether the Federal Reserve Bank will let interest rates rise in the autumn will create public uncertainty that will further discourage purchases of homes and other major items but that the Fed ultimately won’t hike rates.
The danger signs will be behind us when “we witness consistent growth in all (gross domestic product) categories, including exports, and that can happen only when our trading partners are back on their feet and out businesses are investing, which leads to sustained hiring,” he said.
He does see business investment improving around the end of this year, laying the foundation for a healthy 2015.
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