Economists became weathermen Friday, assigning percent chances for a recession in 2008 as easily as the chance of rain today.
Fortunately, the chances were slight.
The dean of the University of Georgia's business college predicted a 40 percent chance of a national economic downturn this year. Wachovia's senior economist followed the Federal Reserve's thinking that it would be 33 percent.
For the 18th year, the region's business community gathered for the Terry College of Business' annual Augusta Regional Economic Outlook. Outside of the recession talk, that outlook was good for the local area.
Augusta added 1,800 jobs last year and probably will do the same this year, predicted Mark Vitner, the vice president and senior economist for Wachovia.
"Augusta has always been able to ride out the highs and lows of the economy better than other markets. We have more stability in this market than the state of Georgia does or the U.S. economy does," he said.
Augusta's unemployment rate will continue to fall throughout the year, too, Mr. Vitner said, landing near 5 percent.
That's a contrast to the statewide experience, which will probably see higher numbers of those jobless. Augusta's unemployment rate was 5.3 percent in November.
Some of that job growth was attributed by economists and local officials to T-Mobile, Automatic Data Processing and the National Security Agency.
"I think for far too long, Augusta was an undervalued commodity. We're beginning to see that businesses and individuals see that we're a great investment," Mayor Deke Copenhaver said.
The combination of a housing slump, oil price shock and the effects of the drought put the state's economy at risk for a recession, said Robert Sumichrast, the dean of the Terry College of Business at the University of Georgia.
"We haven't tipped yet. Our economy is still growing," Mr. Sumichrast said.
The state will grow 2.4 percent in gross domestic product, he predicted, which is not much slower than the 2.6 percent seen in 2007.
Because the state, especially Atlanta, is a transportation and logistics hub, high fuel prices can have a greater adverse effect on the economy.
Where Georgia has an advantage is that it will be viewed as a relocation destination for businesses because of its lower-cost business climate compared to other parts of the country, Mr. Sumichrast said.
In Atlanta, the drought has already caused recessions in urban agriculture, landscaping and garden centers.
"The drought alone will not push Georgia's economy into recession, but in the tug of war between positive and negative economic forces, the drought could tip the balance toward recession," Mr. Sumichrast said.
Even if a recession hits Georgia, he said, it should last only a couple of months and the state could recover in a year.
Reach Tim Rausch at (706) 823-3352 or firstname.lastname@example.org.
FROM THE CRYSTAL BALL
Predictions for 2008:
- Augusta will see employment grow by 1,800 jobs.
- The state's gross domestic product will increase 2.4 percent.
- Augusta's unemployment rate will decrease to 5 percent.