Still
reeling from the effects of a construction boom gone bust, Georgia will
have to wait until 2011 before real recovery in the form of job growth
gains a foothold.
Job losses in Georgia during this severe
recession have totaled more than 250,000, or almost 6.1 percent of the
employment base – a more severe drop than that experienced nationally.
The severity of the recession is linked not only to corporate job
losses from last fall’s financial crisis but also to the severe drop in
residential building activity that has happened in the last 18 months.
Going
forward the Atlanta metro area will lack construction opportunities of
sufficient number and size as the state’s banking industry takes its
time to recover. Georgia has experienced 16 bank failures (almost 25%
of the total national closings) and more are expected. This dries up
the source for construction financing, especially residential. In
addition, with the current freeze in the commercial mortgage-backed
securities market, many previously announced commercial projects in the
Atlanta area, the hub of the state’s construction activity, have been
scrapped due to lack of funding.
All that remains are some small
projects and public works, but the area will need multitudes of those
to make up for one $200 million condo/office project. Indigenous growth
from corporations headquartered here will be key to overall growth in
the future.
Rajeev Dhawan is director of the
Economic Forecasting Center. Dhawan publishes and presents quarterly economic forecasts for the United States
and for Georgia and Atlanta at the center’s conferences. He holds a master of economics degree from the Delhi School of Economics at Delhi University in India and a Ph.D.
in economics from the University of California–Los Angeles.
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