Athens’ economic growth won’t match the statewide average, but will outpace the overall national average, according to the University of Georgia’s annual economic forecast.
The economic expansion of the past decade may have peaked, said Benjamin Ayers, dean of UGA’s Terry College of Business.
That next recession is not imminent, but “it’s time to prepare for the next recession,” he said.
Employment will be up by about 2 percent in 2018 — down from last year’s 2.5 percent growth, but higher than the predicted U.S. job growth of 1.1 percent, Ayers told an audience of about 400 people in Athens’ Classic Center on Wednesday. Athens’ job growth will be about 1.5 percent, he said.
The college’s Selig Center for Economic Growth annually develops a forecast for the state and its major cities, regions and economic sectors. Ayers and Jeff Humphreys, director of the Selig Center, present forecasts in Atlanta, Savannah, and other cities, giving business leaders at each stop a heads-up on upcoming economic conditions in their area as well as the state and national trends.
Some sectors will see strong growth, such as construction, while others will be slower, such as utilities and government, he said.
Biotech will be stable, though there are prospects for growth in Athens for new companies and expansion, according to the forecast.
“The outlook for consultants is good due to higher corporate profits that we’re seeing,” Ayers said.
Single-family housing prices have finally recovered to pre-recession levels in Georgia, more so in some areas than others, Ayers said.
A weaker dollar, among other factors, will help boost exports, which will add thousands of jobs in logistics, transportation and related areas, he said.
High-tech industries will add thousands of jobs in Atlanta, he said.
One factor that will boost the economy is more people; Georgia will see population growth of about 1.5 percent this year, Ayers said.
“We’re not yet at the point of population growth in the early 2000s, but we’re headed in that direction,” he said.
Ayers also noted the state’s booming movie and television industry, now among the world’s largest.
Prices in Athens are about 7 percent above their pre-recession peak, and Atlanta’s prices have gone even higher. But in some places, such as Albany, Macon and Valdosta, housing prices still haven’t recovered, he said.
House prices fell by nearly a fifth during the recession.
Permits to build new homes will be up by about 16 percent this year, he said.
Areas that will see the strongest growth include Atlanta, as usual, but also Warner Robins, Athens and Savannah.
In Athens, new hotels and renovations to UGA’s Georgia Center for Continuing Education are among the factors that will help Athens draw more convention and tourist business, adding jobs, Humphreys said. The Voxpro call center is expected to add hundreds of jobs, and Caterpillar should also do well in 2018, Humphreys said. The Zaxby’s restaurant chain plans a corporate campus in Oconee County that will add 750 to 1,000 jobs over the next 10 to 15 years, he said.
Athens’ economy is tilted toward health care and education, so is less dependent on economic sectors that are inherently cyclical such as manufacturing, construction, and transportation and logistics, he said. It’s not as vulnerable to foreign competition, a change in the dollar’s value, or other “trade shocks,” he said.
“The structure of our economy does make Athens a very comfortable place to live,” he said.
As with any economic forecast, there are headwinds that might slow economic growth as well as wild cards which could lead to abrupt changes for good or for ill, the forecasters said.
More aggressive deregulation, a big federal infrastructure spending package, and immigration reform that increases the proportion of highly skilled and educated workers could help growth.
Threats to growth include Athens’ diminishing role as a regional retail hub due to competition from neighbors as well as the continuing shift of retail sales to the Internet, he said.
Athens is very dependent on state government jobs, and over a longer terms, cuts in state government could slow growth in Athens, Humphreys said.
On the plus side, a number of economic development projects are unfolding in and around Athens, but typically it takes years for such projects to build out.