Economic prognosis puts Georgia's recovery to 2011

Wednesday, Feb. 25, 2009 12:20 PM
Last updated 3:23 PM
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ATLANTA - A national economic stimulus bill could take more than a year to stanch the deepening recession in Georgia, where continued corporate layoffs could delay significant job recovery until 2011, according to a Georgia State University report.

Georgia also could shed an extra 143,100 jobs in 2009, many of those from the continued erosion of the hospitality sector, Rajeev Dhawan, director of Georgia State's Economic Forecasting Center, predicted in a quarterly economic forecast Wednesday.

"Things will get worse before they get better," according to Dhawan, who forecasts the next job growth - about 44,200 positions - in 2011.

But the city of Atlanta could rebound before then, gaining 400 jobs by the second half of 2010, he said.

Wednesday's forecast reflects the state economy's continued slide since November, when the center predicted the beginnings of recovery in 2010.

Since then, state unemployment hit a 26-year high of 8.1 percent in December and Dhawan said corporate leaders have accelerated efforts to reassess company operations.

"Corporations are in what I call a self-preservation mode, which involves drastic, cost-cutting maneuvers," Dhawan said.

Georgia's unemployment will reach 9 percent in 2009 and could hit 10.5 percent by 2011, the report said.

President Barack Obama's $787 billion economic stimulus program is designed to offer some relief. It could funnel $6 billion to Georgia.

But Dhawan said the stimulus fails at addressing declining revenues that have plagued local governments across the state, and which he predicted would continue for the next few years.

"The finances of state and local governments are taking a big hit with the double whammy of falling retail sales and property tax collections, which has led to layoff announcements from various municipal entities," Dhawan said in a press release. "Unfortunately, the portion of the recently approved stimulus bill directed toward bolstering state finances will temper, but not eliminate, this decline."

State legislators are deciding just how to divide the money. Wednesday, the House Appropriations Committee approved a budget that channels millions of stimulus dollars into Medicaid and education.

Mayor Chip Thompson hopes a couple of million dollars head to Winder.

He's wrangling with a projected $1.4 million budget shortfall and falling tax revenue that forced the city 50 miles north of Atlanta to lay off 30 employees this month.

The city's seeking $19.5 million in federal dollars for shovel-ready projects, Thompson said. Those include infrastructure projects that could create several hundred positions and fill recently emptied city jobs, he said.

But Thompson worries Georgia municipalities like his could get lost in the federal windfall.

"I don't know how the governor's going to handle it, whether he's going to want it all to go to the state agencies and trickle down to all the cities and counties," he said. "I would hope we would be able to get the money quickly, but I don't see that happening."

Wednesday's report also predicted a loss of 92,200 jobs in Atlanta through 2009.

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soldout
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soldout 02/25/09 - 03:09 pm
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The normal presidential

The normal presidential election cycle for the market says the last two years of a term are better for the market so that would agree. The recovery will probably bring inflation with it but between now and then probably deflation and some shortages; maybe 1.00 gas too.

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