ATLANTA -- The economy will eventually improve in Savannah, but not before months of “dim growth prospects,” according to a forecast released Wednesday by the Economic Forecasting Center at Georgia State University.
“Consumers haven’t pulled back, but the economy is experiencing a growth slowdown, but thankfully not the free fall of late 2008,” said Rajeev Dhawan, director of the center. “Thus, the desire to be cautious about spending by both consumers and corporations is bearing on us in the coming six months.”
Savannah enjoyed a significant turnaround in the July-September quarter going from a negative 1.3 percent job-creation rate in the first half of the year to a positive 1.8 percent with all business sectors benefitting.
“Going forward, however, we expect job growth to be uneven,” he said. “Our forecast calls for a 1 percent increase in jobs in 2012 and growth of 1.7 percent in 2013.”
Overall growth for the state will be weak through the first half of 2013 but begin improving, becoming steady in 2014. The forecast calls for this year to finish registering 1.2 percent job growth and an even more tepid 1.1 percent in 2013.
That will mean 2012 will notch an unemployment rate of 9.1 percent with an 8.9 percent rate in 2013.
Dhawan isn’t worried about a recession being triggered by the “fiscal cliff” of federal spending cuts and tax increases that are scheduled to take effect Jan. 1 because he expects the politicians to soften its blow and because problems in Europe are so much worse.
“Things will improve afterwards as we make a credible down payment schedule to solve our fiscal issues -- again, a big if,” he said.
Europe’s troubles and China’s slowdown will cut into Georgia’s exports, especially for aircraft like those made by Gulfstream and for machinery and automobiles like Kia makes here. The leisure/hospitality segment will continue its slow pace, expanding payrolls by just 0.6 percent for this year and 1 percent in the next.
The sectors with the strongest job growth this year will be professional/business services at 4.7 percent and transportation/equipment at 4.8. The weakest are shrinking, such as real estate which is down 5.3 percent and mining and construction which are off 3 percent each.
Retailing, which is a major employer, comes in the middle. It will add jobs at a 2.5 percent this year and a 1.4 the next.