Friday, August 26, 2016
NOTES FROM THE SENATE, AUGUST 26, 2016
GEORGIA 5TH IN JOB GROWTH IN BLS CURRENT DATA
When anyone examines Georgia's prosperity and growth rate, one of the state's underlying strengths quickly comes to light-and that is job growth. Further evidence of the strong job growth going on in the state showed up in current data released for July from The Bureau of Labor Statistics (BLS) as compiled and ranked by the WP Carey School of Business at Arizona State University. The rankings are not seasonally adjusted and change as the months roll on, but the 12-month moving average released recently shows Georgia ranked as high as 5th nationally in creating and retaining jobs. States ahead of Georgia included only Utah, Idaho, Oregon and Florida.
Georgia is noted for having a diversified economy which is given credit for successful job creation. States like Texas, heavily dependent on the oil and gas industry and the entire energy sector, have been hit hard by the decline in the world-wide price of oil and increased oil stockpiles.
Updated year-to-date data showed Georgia as high as 6th even as some pressures reduced the job creation index by 3.03%.
NCSL/GOVERNING RANKING-GEORGIA 15TH
Another ranking of state economies recently published by the National Conference of State Legislatures and compiled by Governing Magazine ranked state economies from the strongest to the weakest. Georgia's economy came in as the 15th strongest in this listing, a little under North Carolina, Florida and Tennessee but ahead of South Carolina. But when you examine the methodology, Georgia intuitively looks better than 15th. The Governing study double weighted two categories in compiling the ranking-unemployment numbers and percent change in real GDP. Georgia has an unemployment rate now of 5%, but as history has taught us, a state like Georgia creating a high number of jobs and a state where people move to get a better job, can have a higher unemployment rate because they are leading in creating new jobs. As the BLS ranking in the first paragraph shows, Georgia is among the leaders nationwide in job creation even as the state shows 5% unemployment.
MANUFACTURING SECTOR IS STRONG
According to the BLS, Georgia saw improvement month over month in employment in the industry sectors of Manufacturing, Trade, Transportation and Utilities, Education and Health. For the year ending July 2016, all of the above sectors showed improvement, demonstrating broader based gains in many states. The manufacturing increases are especially interesting as state economic development efforts have been focused on securing manufacturing companies in the state.
The state's presence in manufacturing extends from textile mills to transportation, with the state diversifying in manufacturing. Areas of North Georgia, traditionally strong in textile manufacturing, continue to be areas of concern, especially those reliant on strong textile industries.
DR. DHAWAN'S CAUTIOUS PROJECTIONS
Georgia State University's Director of the Economic Forecasting Center, Dr. Rajeev Dhawan, published his periodic projections last week and some of his projections mirrored my concerns shared with you in this column two weeks ago. He sees job growth slowing next year and cites Georgia's connections to the rest of the world, noting England's Brexit, China's economic problems and the continued world chaos in the oil industry. He sees job growth slowing in Georgia from 98,000 jobs this year to 75,100 jobs next year. Home-building, a bright spot for Georgia nationally, will slow, he believes by 3.3% next year. Georgia will continue to struggle to grow good-paying jobs, as every state is.
So, the challenge for Georgia's leadership is to continue to outpace other states in job growth. That one key ingredient can buffer any slowdown caused by international events.