Both Augusta and the state are expected to experience zero job growth this year. Of the state’s metro areas, just one is seeing expansion of as much as 1 percent, and that’s Columbus, which is still digesting the new soldiers and civilians moving there as part of the military base realignment.
Recent areas of rebound are being overshadowed by problem sectors in Georgia’s economy. Gains in professional/business services, manufacturing and health care aren’t powerful enough to overcome losses in construction, local government and banking, said Rajeev Dhawan, the director of the Forecasting Center.
“The growth is in heavy manufacturing, high tech and new technology, and old staples are becoming a drag on growth,” he said.
For example, health care grew last year but at less than half its historic rate. Health care hiring isn’t likely to resume its past tempo despite an aging population, Dhawan said, because of hospital consolidations and depressed demand for elective procedures during the weak recovery.
“Going forward, I think this sector will not be able to contribute at its former pace of growth,” he said.
The price of energy is a large factor for the leisure and hospitality sector. Gas prices are already depressing discretionary travel, and an embargo on Persian Gulf shipping, where one-quarter of the world’s oil transits, will send shudders throughout the whole economy, the forecast says.
For small business in Georgia, traditionally the source of most employment, the lack of bank lending continues to be a brake on activity. The failure of 23 banks here last year and the 21 in 2010 has the financial sector shedding jobs this year and next, according to the university’s outlook. That means they’ll be fewer loan officers competing to lend to entrepreneurs and those remaining will continue to be cautious.
Nationally, the economy will grow by 1.8 percent, after counting inflation of 2.1 percent, according to the forecast.
That’s a higher inflation rate than businesses see, according to a survey also released Wednesday by the Federal Reserve Bank of Atlanta. The companies polled are predicting a 1.9 percent inflation rate, but that was a slight increase over the 1.8 percent rate they predicted in last month’s survey. That has them edging toward the Forecasting Center’s estimate.
The majority of the 168 firms that the Fed questioned predicted higher prices for materials but not for labor. They also said the inflation is squeezing their own margins and continuing to depress sales.
For Augusta, this year began on the heels of a 1.4 percent job loss during the last three months of 2011. Sectors issuing the most pink slips locally were retail trade, construction, manufacturing and government. Those hiring were professional and business services; transportation and utilities; and education and health.
“Given statewide continues, we forecast no increase in employment for 2012, followed by a significant increase of 1.6 percent in the annual employment level for 2013,” Dhawan wrote in the forecast.