Originally created 04/24/98

Local buying power lower than state

Economic forecasters say the Augusta area will see moderate increases in buying power through the millennium, but will still finish behind Georgia and national averages.

The Augusta area will have experienced a 47 percent increase in disposable income from 1990-1999, according to a recent study by the University of Georgia's Selig Center for Economic Growth.

That figure would be higher than some states such as New York and Hawaii, but lower than Georgia's estimated 71.6 percent increase and the estimated 56.7 percent national average.

"Augusta is still outperforming many other states, but nonetheless, it is still behind the nation as a whole and well behind the state average," said Jeffrey Humphreys, the center's director of economic forecasting.

Using pre-1996 economic data, Mr. Humphreys estimates the $6.2 billion in disposable income Augusta-area residents had in 1990 will grow to $9.2 billion in 1999.

Cutbacks at Savannah River Site and the textile and apparel manufacturing industry, coupled with slower job growth in the health-care industry, bears most of the responsibility for the low growth rate, according to his report.

But population growth also plays a big role in buying power, Mr. Humphreys said. Of Georgia's eight metropolitan statistical areas, only slow-growing Macon, with 46.2 percent, is behind Augusta with the lowest increase in buying power.

By contrast, metro Atlanta's population boom contributes to its estimated 80.5 percent increase, a figure outpacing the state and national averages.

Although Augusta's buying power is not expected to grow as fast as other Georgia cities, major local retailers have been impressed by the spending they have seen so far.

"We are hitting our projected numbers. The city has certainly met our expectations ," said Matt Dehn, manager of the recently opened Target store, which conducted extensive market research before deciding to build its 123,000-square-foot store in Augusta.

Local spending had to be somewhat strong or else the corporate chain would not have located here, Mr. Dehn said.

"I think people are spending more," said Nick Amato, manager of the J.B. White department store in Augusta Mall. He said all Augusta locations have seen average daily sales increases the last several months. "We're also drawing people from a larger area."

Of counties in the Augusta area, only Columbia County will experience rapid growth in buying power, according to the report. The subdivision boom increases the county's overall population, thereby boosting its buying power, Mr. Humphreys said.

But that does not mean Columbia County is the sole beneficiary of its residents' disposable income.

"A county's buying power doesn't necessarily mean the dollars get spent there," he said.

Georgia, the report concludes, is a healthy state that will "continue to enjoy enviable growth in buying power" for the rest of the decade, growing to $170.2 billion in 1999.

Of states east of the Mississippi River, only North Carolina's estimated 73.3 percent gain will exceed Georgia's 71.6 percent gain.


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