UGA forecast: Ga. economy to outperform U.S.By WALTER C. JONES
Morris News Service
ATLANTA — The Georgia economy will continue improving and slightly outperform the rest of the nation, according to a forecast the University of Georgia released Thursday at the kickoff of a series of luncheon presentations around the state.
The university’s Selig Center for Economic Growth in the Terry College of Business prepared the forecast which calls for the state’s employment to grow by 2.1 percent in 2013. That would be a tiny improvement over the negative 2.0 percent pace for the current year.
“I think Georgia’s economy will grow in 2013 and grow faster than the nation as a whole. That’s a change from what you’ve been hearing from me in the past five years,” Terry College Dean Robert Sumichrast said. “... Don’t get too excited. We’re only predicting growth a little over 2 percent.”
For the first time since 2000, no sector of private employment will reduce jobs, even though the government sector will.
The leisure/hospitality, professional/business services and manufacturing sectors are adding jobs at the fastest tempo. Exports will continue growing, but at a slower rate next year.
The UGA economists are betting that Congress finds a way to avert most of the impact of the so-called fiscal cliff of steep, federal tax hikes and spending reductions scheduled for Jan. 1.
The solution is likely to be less-drastic versions of the same cuts.
Local governments — like the federal government — will continue to shrink their payrolls as depressed real-estate values weaken property-tax collections.
However, state government here has already cut more than 6,000 jobs and now spends 4.3 percent less than it did 10 years ago, according to Gov. Nathan Deal, the luncheon’s leadoff speaker. It also doubled its reserves just since he entered office.
“I think it exemplifies in very concrete terms that the state of Georgia is trying to be frugal,” he said.
Sumichrast said the state’s efforts to trim are one reason Georgia’s economy will outperform the national economy next year. Low costs, tax advantages and friendly government policies will also contribute.
But the economists said small-business owners, who typically create the most jobs, will feel the sting of tax increases and will continue to have trouble getting money to expand.