Friday, December 29, 2017
NOTES FROM THE SENATE, DECEMBER 29, 2017
TEN REASONS TO BE OPTIMISTIC FOR 2018
There have been years when it took some effort to find bright spots of optimism in the state to write about, especially during the recession. Not this year. Georgia enters 2018 with solid progress under its belt from the past few years and economists see a bright future in 2018 for the state. Even if the job growth is not as good as in 2016 and 2017, compared to almost any state around the country, Georgia is uniquely positioned to continue to grow personal income, create jobs and take its place as a leading economic force in the country.
1. GEORGIA CONTINUES TO GROW
Georgia is now the 8th most populous state in the U.S. and in the 2017 estimates ranked 6th in actual population numbers growth with 115,759 gain. While growth brings more children to educate and more services to provide, there is no doubt that a state can grow its way out of many problems. In this world where workforce is everything, you have to have people in order to grow workforce.
2. AGRICULTURE- EXPORTS LEAD
Certainly commodity prices continue to hold back agriculture from prosperity. But there are bright spots. Most important may be the national leadership of Agricultural Secretary, Sonny Perdue, a strong advocate of ag exports and international trade. Georgia's Zippy Duvall, National Farm Bureau President, signals the importance southern agriculture is playing nationally. Fresh vegetables continue to prosper, as do pecans, poultry, soybeans and blueberries, all increasing in exports.
3. NATIONAL ECONOMY- GOOD GETTING BETTER
While Georgia has a history of outperforming the national economy, we do follow national trends so the better the national economy, Georgia stands to gain as well. First of all, the global economy is moving in the right direction, with an index of 20,000 companies worldwide having their best year since 2011. Nationally, GDP growth hit 3% in the second and third quarters and prospects are good in the fourth. Strong job growth of 228,000 in November and an apparent successful Christmas buying season all signal good times for 2018.
4. THE PROOF'S IN THE JOB ANNOUNCEMENTS
Economists are generally better at explaining the past than predicting the future, but in Georgia, they are very optimistic about 2018. They see strong job growth even if less than 2017. Low unemployment under 5% usually indicates about as close to full employment as we get these days. Dr. Rajeev Dhawan, Georgia State Economic Forecasting Center predicts Metro Atlanta job growth at 51,900 jobs for 2018. While less than 2016 and 2017, it stands to reason job growth might slow with low unemployment.
5. TECHNOLOGY- GEORGIA TECH'S A KEY
Atlanta continues to grow the technological sector, a factor that hopefully fits in with Amazon's pursuit of an Eastern U.S. headquarters location. Wells Fargo reports that Tech Square adjacent to Georgia Tech's campus is proving to be a huge draw for firms wanting to take advantage of Georgia Tech's technology expertise. NCR and Honeywell have invested and Amazon has a nearby development hub. Georgia's financial technology sector showed 25% in job growth over the previous year.
6. "YOU OUGHTTA BE IN PICTURES"
Defying other states' pull back on tax credits for movie- making, Georgia is racking up record numbers of movie projects, direct investment and eye- opening economic impact. A recent report on one year points to Georgia becoming the world's number one filming location, ahead of California. Georgia even hosted a "Georgia Night in L.A." reception recently to mark the state's role. Growth in infrastructure like sound stages, now maybe as many as 100, mark the permanency of investment in movie production in the state. The Motion Picture Association estimates as many as 2,700 businesses in Georgia are connected to the industry.
7. STILL NO. 1- AFTER ALL THESE YEARS
There must be a reason Georgia was named the "Number One State in the U.S. to Do Business" for the fifth straight year. The proof that it's true lies in the terrific new and expanded business numbers. Back at the end of September, "Notes from the Senate" noted the incredible progress Georgia had made in FY 2017, including 377 companies starting new construction or expanding, creating some 30,309 jobs and resulting in $6.33 billion in new investment. Some 59% of new jobs created were through expansion of existing industry and existing Industry investment was 58% of the total. New businesses coming to Georgia invested $2.64 billion.
8. THE PORTS- SUCCESS HAS A SAFE HARBOR
Georgia's ports continue to be a success of nationwide importance. The potential for growth predicted by the widening of the Panama Canal and the deepening of the Savannah harbor has already proven to be accurate. The huge Neo- Panamax ships are increasingly carrying more cargo since June of 2016. The size of the average ship entering the Savannah harbor has increased 20%. A Wall Street Journal article pointed out the shortening of shipping time for Asia shippers to the East Coast now that larger ships can navigate the Panama Canal and avoid the Suez Canal.
9. ADEQUATE RETIREMENT INVESTMENTS
One of the main reasons Georgia has maintained its AAA bond rating from all three rating agencies has been the consistency Georgia has had of making the Annual Required Contribution to the state's retirement plans. Both ERS and TRS are well- funded and on the way to having even better assets to liabilities percentages. The FY 2019 budget is slated to appropriate some 300 plus million to TRS. This is part of a plan to improve its funded formula. Unlike some states, Georgia, with its two year retirement legislation requirement, has not added new or expanded benefits without the funding to put in cash for the first years cost, as required by Georgia law.
10. NO SECRET- GEORGIA'S ON TOP OF CYBER SECURITY
With an additional $35 million to be added to the FY 18 Amended Budget for the second phase of the Cyber Security Center in Augusta, Georgia has cemented its position as ground zero for NSA and the military's work in cyber security. The new funding adds to $58 million that will be invested in Augusta. This addition will house an incubator and workforce development center for start-ups. Fort Gordon is now the home of the U.S. Army's Cyber Center of Excellence and part of the new cyber command.