We began this “10 Reasons” column in the middle of the recession when it seemed the only news there was, was bad news. There was a period of time where every month that went by, state revenues were worse than the same month of the previous year.
This, in fact, was the record for some two-and-a-half years.
So, amid the pessimism and just dreadful economic news for our state, which mirrored the country, it seemed a good exercise to try to find reasons to be optimistic in the midst of this downpour of bad reports.
I say this to point out that, if you wanted to pick out negatives in the economy and the foreseeable future, there is certainly a case to be made for some of them. But I will leave that reporting to the press and others who have an agenda for doing so. This column attempts to find the elements and trends of activity that give us reasons to be encouraged and yes, optimistic.
1. Georgia’s economic development efforts — paying off — Georgia experienced a 10 percent increase in job creation in FY2013, showing 389 expansions or new location announcements generating 31,656 jobs and $6.07 billion in investment. This trend continued in last half of CY13.
2. Overall economic outlook — starting to outpace national recovery? — In the Georgia Economic Outlook by the UGA Terry College of Business, Dr. Jeffery Humphreys projects 3 percent growth in Georgia’s GDP, up by .7 percent over last year and more importantly up the same amount over the expected growth nationally. He also projects personal income to grow by 5 percent in 2014, a higher projection than the 4.2 percent national rate expected.
3. Job growth — There are indicators from different national sources that predict Georgia will have robust growth in 2014. The National Conference of State Legislatures published a report of the Pew Charitable Trust this week titled “Which States Will Generate Jobs in 2014.” This report ranks the fastest job growth states expected in 2014 and Georgia comes in at number 6 with a 2.18 percent rate. Three of the five are much smaller states with only Texas and Florida ahead of Georgia in the south.
4. Housing coming back — Home prices, one of the real declines dragging down recovery during the recession, show all signs that 2014 will be a good year. Dr. Rajeev Dhawan, in his economic forecast, reported home prices appreciated some 13.5 percent in 2013 and projects continued growth at 2 percent in 2014.
5. Reserve fund grows — Through sound management and increased revenue growth in FY 13, Georgia’s revenue shortfall reserve (RSR) has grown to $682 million and the year-end lapses more than account for the mid-year education adjustment that comes out of the reserve. Before the recession, the state had a reserve of around $1.6 billion which disappeared in the balancing of the budget in FY2008 and 2009. Ten percent of previous year’s revenues equal about $2 billion in reserves.
6. Federal Reserve — ”Georgia-a top 10 boom state”— The Philadelphia Federal Reserve earlier this fall reported a ranking of states nationally by “coincident growth” and those growing over 1 percent were ranked as “booming states.”
Most states, 45 in number, were under 1 percent or in the “moderate” category. But 10 states with growth over 1 percent were classified as “booming states.” Georgia was ranked as one of those top 10. Only South Carolina and North Carolina from the South were ranked in that group besides Georgia.
7. Georgia’s ports — another great year—Through the end of November, container traffic at the Port of Savannah is up 5.5 percent on movement of 1.3 million TEUs (test—what does this stand for?). At Brunswick, through November, the port has moved 275,020 autos and moveable equipment for an increase of 5.6 percent over last year same period.
Savannah also processed 10,874 units of roll-on/roll-off cargo, a 7.4 percent growth there. So, as the pathway to deepening the port opens up, the growth in traffic at Georgia’s ports demonstrates the tremendous potential.
8. State revenues —steady growth, title fee success — Through December, state revenues are growing at a 5.1 percent rate and the trailing 12 month average is 6 percent. While there are questions inside the numbers, state revenues continue to move up overall and each year has shown steady growth and recovery, although state revenues for the fiscal year still total about the same level as in 2007. Since the conversion to a title/tag fee substituting for sales taxes on new and used automobiles, this category has shown an increase of $371.2 million for the six months through December.
9. Unemployment rate continuing to fall—The recent unemployment rate for November of 7.7 percent was the lowest rate in five years. In fact, Dr. Humphrey’s Economic Outlook projected an average rate of 8 percent in 2014, so this 7.7 percent rate could portend an even more optimistic outlook for the state.
10. Agriculture—There have been so many “best ever” years for agriculture lately that a good year may seem like something lacking. But for those of us who remember years of “worst ever” prices, we can see good news in relatively stable prices, good rainfall this past year and steady growth in exports for many products like pecans, poultry and forest products.
Farming is still profitable on balance and full ponds and a healthy aquifer is encouraging for the coming year.
Actually, there were other signals left out of this listing, but you get the point. No matter how some may look on the negative side, Georgia has much to be optimistic about and there are abundant good signs for 2014.
I may be reached at
234 State Capitol, Atlanta, GA 30334
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(404) 657-7094 (fax)
E-mail at Jack.Hill@senate.ga.gov
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