This “10 Reasons” column began during the dark days of the recession, when there was little reason for optimism. Economists were being proven wrong about the depth and longevity of the recession, and the economy of the state and the nation was sinking lower and lower.
As an eternal optimist, I set out to find positive signs for the coming year and found our state still had much to be thankful for. Some things came true and some did not. But here we are completing a successful year in 2014 and looking forward to a solid year ahead in 2015.
1. State revenues continue to grow at a very positive rate. The 12-month trailing average sits right at 5 percent as does the average so far this fiscal year. Everything is relative, so when we compare the 12-month average to other states, we find two things: (1) Georgia’s increase is higher than any state around us except Texas, and (2) the oil and gas states are missing revenue estimates due to falling oil prices. Florida is at 4 percent growth and the rest of the states come in at around a 2 percent gain. North Carolina is showing negative revenue growth so far this year after apparently miscalculating the cost of an income tax cut.
2. “Take that unemployment rate and stuff it!” Benjamin Ayers, dean of the Terry College of Business at the University of Georgia, disclosed his economic forecast for Georgia last week and predicts that Georgia will outperform the U.S. in economic growth (3.2 percent vs. 2.6 percent) and in job growth (2.3 percent vs. 1.9 percent). He projects job growth of 96,200 for the state and predicts a full point drop in unemployment rate during the next year. The odds of another recession? Only 25 percent ....
3. Georgia is seen in other corners as well as a leading state for job creation. The U.S. Department of Labor’s Bureau of Labor Statistics in October showed Georgia as creating the fifth-highest number of jobs in the U.S. at 96,000 jobs for the last year. Georgia has been in the top 10 states for job creation every month since October 2012.
4. Georgia’s “rainy day fund” or RSR, continues to build and today stands at about $988 million. After end of fiscal year lapses are added, the reserve could top $1 billion for the first time since 2007. One billion runs the state only about 15 days ....
5. Oil prices dropping over $1 dollar per gallon over the past few weeks is a net gain for consumers in the state and is pumping new dollars into the economy. While there are some possible negatives like fuel sales taxes falling, consumers appear to be spending the savings from the gas pump. And, since Georgia is not an oil/gas-producing state and does not depend on any revenues there, the state is not in the condition oil rich states are, facing drastically declining revenues. Those states in the Southeast are reporting missing revenue targets resulting in deficits.
6. Long-term prospects for Georgia agriculture have to be looking up with the now validated reports coming out of California. They are painting a dim projection of the future of agriculture in the state due to the drought that may turn out to be just normal conditions, and the much-publicized water shortage for which there appears to be no solution. It looks like agriculture comes in third in water allocation for the future behind people and manufacturing/business. Agricultural specialists and educators predict that South Georgia stands to gain with its long growing season and could become the new breadbasket of the nation.
7. Regardless of the political debate, the move to normalize relations with Cuba and the resulting trade implications is good news for Georgia, and particularly agriculture, since the state’s agricultural interests have had a long relationship with the country and worked around the restrictions placed by the two countries’ lack of normal diplomatic channels. Georgia’s poultry, eggs, and commodity products could see substantial growth if the earnings of Cuba’s population start to improve and standards of living are raised. Georgia’s close proximity for shipping would reduce delivery time, a natural advantage for perishable products like poultry. Georgia’s turfgrass industry could play a role in the expected rapid expansion of resort facilities, which would be one way to bring new dollars into Cuba quickly.
8. New home construction, long a cornerstone of Georgia’s economy, continues to show strong growth and recovery. The National Association of Home Builders cites statistics showing building permits in Georgia having a robust 9 percent increase year-to-date through the third quarter. By contrast, the national growth rate was 2 percent and in the Southeast 3 percent.
9. Georgia’s ports continued to show solid growth and the CEO’s goal of Georgia’s ports achieving No. 1 status doesn’t seem like a pipe dream. Brunswick’s port showed double-digit growth in both total tonnage and roll-on/roll-off vehicle traffic. Also, wood pellet shipping tonnage was up 21.9 percent. What can you say about Savannah’s port — which grows phenomenally even before the deepening. In October, the port set new records for shipment of TEUs, a 13.1 increase and both ports set a combined tonnage record in October and new records for most truck gate moves as well as for rail moves. Savannah is now sold as the “largest single container terminal in North America.”
10. “It ain’t braggin if it’s true!” Georgia’s success in bringing new jobs and investment to the state in 2014, if not tied directly to being named “No. 1 state for doing business,” at least can be attributed to the policies that created the environment to be successful in recruiting new and expanded employment. Since January 2014, Georgia has seen 374 new projects, creating 28,404 new jobs resulting in $5 billion in new investment. And the more other states question the validity of tax credits for film and TV production, the more success Georgia seems to have. Since 2010, there have been 12 film and TV studios making announcements to build facilities in Georgia, bringing permanent jobs and creating opportunities for some 100 support service companies to set up shop.
I may be reached at
234 State Capitol, Atlanta, GA 30334
(404) 656-5038 (phone)
(404) 657-7092 (fax)
E-mail at Jack.Hill@senate.ga.gov
Or call toll-free at
1-800-367-3334 day or night
Reidsville office: (912) 557-3811
