UWG Hosts Economic Forecast Breakfast: Regional Growth Marks Stronger Employment, Highlights Housing Challenges
Wednesday, November 8th, 2017
Continued growth in wages and overall labor force are forecast for west Georgia, while finding affordable housing to accommodate that growth has become more difficult.
That combination of opportunity and challenge was the recurring theme of the annual Economic Forecast Breakfast held at University of West Georgia by the Center for Business and Economic Research, a research center at the Richards College of Business.
“Unemployment rates are down in every county across the region, averaging 4.6 percent,” said Dr. William J. (Joey) Smith, chair of the Department of Economics. This is an unemployment level lower than west Georgia has experienced since the start of the recession. Income has grown at 3 percent, a trend Smith forecasts to continue over the next couple of years. Employment growth rates have grown at rates ranging from .61 percent in Haralson to 5.97 percent in Paulding over 2016 to 2017 first quarters.
“We thought we were doing well last year,” Smith said. “We’re doing much better this year.”
Manufacturing in the region leads this growth with creation of 1,352 new jobs, 953 of them landing in Coweta County. Service jobs, however, are more mixed. Carroll County lost about 200 retail employees, according to Smith, a fact offset somewhat by the addition of approximately 150 transportation and warehousing jobs. Smith sees these changes as reflective of overall national trends.
“We’re not immune to the online shifts of the retail sector,” he said, as brick and mortar outlets adapt to emerging e-commerce.
Another strong area has been healthcare, with an increasing rate of growth.
“Pretty soon, healthcare is going to overtake retail as a dominant subsector of the service sector,” Smith said, projecting around 20,000 healthcare workers in the region by the end of this year, totaling about one-fifth of the jobs in the region.
Government employment and agriculture also have contributed to overall growth in the five-county region.
“Agriculture generates a lot of local income that stays local,” Smith said, noting a $400 million impact on the region.
Beef and poultry in particular have fared well as low energy prices have kept down the price of production.
This current and projected growth has, however, ushered an immediate challenge to the region.
“It’s becoming a more difficult process to find a home,” Smith stated. “Houses are more expensive than they were this time last year. If prices continue as we’ve seen, in the next couple of years every county in the region is going to be above peaks we saw before the great recession.”
Although single family housing permits are up by 11 percent from January through July 2017 (as compared to the same period last year and not including Polk County), Smith believes more building is required to accommodate affordable housing needs as the region grows.
“We could probably add several hundred more new houses than we are currently adding, and the market would easily soak those up,” he said.
Changing Lifestyles and Opportunities
Kenneth Shiver, chief economist of Southern Company, which provides gas and electrical energy to 9 million customers, picked up with housing amid this changing economy.
He explained that, prior to the recession, growth in gross domestic product held a strong, positive correlation with sales of electricity. In other words, “So goes the economy, so goes the demand for electricity.”
“But that relationship has changed,” Shiver said. “Now for every percent growth in GDP, we see about a quarter-percent growth in electricity demand. Why has this relationship changed?”
The nature of residential growth has changed. While 69 percent of existing customers live in single-family homes and 21 percent in multifamily homes, among new customers, nearly double, about 40 percent, live in multifamily homes.
“We’re seeing millennials a whole lot less interested in owning their own single family homes and wanting to live in a multifamily in a city with lots of good amenities,” Shiver said.
A slow-growing economy makes multifamily living a less risky deal, and the construction of multifamily homes creates fewer jobs than single family, thus cooling the economy as well as energy demand. Shiver expects no abatement in this trend, noting that recreation options, such as Carrollton’s GreenBelt, are major attractors.
“These are the amenities people are looking for, and it’s not just a fad,” he said.
As with Smith, Shiver emphasized the retail sector's shift toward e-commerce rather than brick and mortar box stores.
“The good news locally is, I’m seeing a lot more niche stores that don’t have the same thing every other store does being a lot more successful than in the past,” he said, “and I think that is a great opportunity here in Carrollton.