The age-old question of "How is our local economy doing?" now has an answer.
Augusta State University's Hull College of Business on Tuesday unveiled the Greater Augusta Economic Activity Index, a measurement of the Augusta-Aiken economy based on a compilation of statistical data ranging from unemployment claims and home prices to wage growth
and hotel/motel occupancy.
The index, created by ASU economics professor Mark A. Thompson, will be reported monthly and will include a six-month economic forecast for the six-county area. The report will be published monthly in The Augusta Chronicle starting next month. The report will also be distributed by mail and e-mail to subscribers.
Hull College Dean Marc Miller said he expects the index will be a valuable tool for local bankers and other "key decision-makers."
"This is obviously a great tool for any of us in business, especially in banking, to determine what's going on in the community in terms of the economy, construction and unemployment. These are all tools that a business person can use in terms of planning for the year," said Chris Verenes, a president of Security Federal Bank in Aiken, one of several business leaders who attended a presentation of the index at the ASU campus Tuesday.
The only other broad measure of the area economy is the metro gross domestic product report by the federal Bureau of Economic Analysis, which has a two-year lag time. That makes the Greater Augusta Economic Activity Index, which has a two-month lag, more of a real-time economic indicator.
"If Augusta was in a recession, it wouldn't know it until 2009 or 2010 based on the metro GDP figures," Dr. Thompson said.
Patrick Blanchard, the president and CEO of Georgia-Carolina Bancshares Inc., was excited at the prospect of having current data available.
"I think this information will give us a better insight on where our economy is at any moment in time, and therefore it will help us in making decisions - and making particular short-term decisions," he said.
Like other economic indexes, an increase in the Greater Augusta Economic Activity Index reflects economic expansion, while a decrease indicates a slowdown in activity. The index, which uses January 2002 as the 100 baseline, is similar to the one Dr. Thompson developed for Little Rock, Ark., when he was the state economic forecaster at the University of Arkansas' Institute for Economic Advancement.
The index's November 2007 reading, the latest figure available, is 107.50, which is a 0.08 percent decline from the previous month but a 1.19 percent increase from November 2006, Dr. Thompson said.
Based on his current reading, Dr. Thompson is forecasting a decline in local economic activity during the first half of 2008 as the housing market undergoes a "correction."
"It will rebound and pick up in the later half of 2008," he said.
Dr. Thompson said he does not believe the U.S. economy will go into a recession in 2008, but he acknowledged there is "absolutely" an increased risk.
He predicts the Federal Reserve Bank will cut interest rates by a half percent and one-quarter percent during its next two meetings.
Reach Damon Cline at (706) 823-3486 or firstname.lastname@example.org.