If the economic forecast delivered Monday to Columbus business and community leaders holds true, 2017 will be a year of local job growth, an improving housing market, stabilization at Fort Benning and more small business entrepreneur activity.
That was the prognostication delivered by Greater Columbus Chamber of Commerce Chair Billy Blanchard, using data compiled by the University of Georgia’s Selig Center for Economic Growth. The event, held at the Columbus Convention and Trade Center, is part of an annual statewide blitz by UGA’s Terry College of Business.
“The economic forecast for Columbus calls for job growth to accelerate,” said Blanchard, recently retired president of Columbus Bank and Trust and now a partner in Jordan-Blanchard Capital. “The economy will do significantly better in 2017 than it did in 2016 and tremendously better than it did in 2015.”
The bottom line number: The Columbus metropolitan statistical area is projected to add 1,500 jobs this year, which would be above the 1,000 it gained in 2016. The area actually lost 300 jobs in 2015.
“If the forecast bears out correctly, 2017 will be the second straight year of job growth and this will represent the strongest back-to-back job growth since the millennium began for Columbus,” Blanchard said.
The job growth last year was notable, the financial executive said, considering Fort Benning — the area’s largest single employer — was in contraction mode. The U.S. Army military post wrapped up a downsizing that saw the installation lose a combat brigade and about 2,400 soldier positions to federal budget cuts.
“We don’t expect any additional cuts in 2017, so Fort Benning will not be an immediate headwind, which is a huge improvement over what we’ve seen in the previous couple of years,” said Blanchard, cautioning that is only temporary relief from economic pressure, with the military likely to hold a major Base Realignment and Closure (BRAC) round after 2019.
The Columbus metro area also is expected to bear fruit from expansions and investment in the last two years by local employers, including aircraft technology firm Pratt & Whitney, call center Convergys and health insurer BlueCross BlueShield of Georgia. In all, the companies have promised 867 additional jobs, while investing just under $124 million in new and expanded facilities, data show.
Leading the job-creation momentum this year overall, Blanchard said, will be the financial and insurance sectors, with leisure and hospitality also strong as the U.S. and Georgia economies experience growth. That state and national momentum should spur more travel to the city, with its attractions benefiting, he said. The visitation will include individual vacationers, as well as business groups and organizations holding meetings here.
Another major piece of the economic pie is expected to be improvement in the housing sector, according to the forecast, which would be welcome news for a critical area of the local economy that has been slow to recover since the Great Recession.
Single-family homebuilding remained in recession locally in 2016, Blanchard said, but the industry should get a “modest” boost from the projected job creation. Home prices, meanwhile, have been “very weak” and are still 12 percent below their peak level in 2006 prior to the recession. But prices are expected to gain some traction in the coming year or two.
“Economic growth is difficult to sustain without participation of the housing industry,” he said. “In 2017, the much anticipated uptick in homebuilding is going to broaden the base of job growth of Columbus and create a much more durable economic recovery.”
Blanchard noted that there is optimism for the coming year, with some “considerable upside” for the Columbus-area economy. A big help, he said, would be landing a major development project such as a large employer. Prospects the city is seeking, he said, include those in manufacturing prospects, auto parts, call centers, data centers, cyber-security and financial technology.
Adding more projects into the economic pipeline is a cornerstone of the expectations for Georgia as well in 2017, said Benjamin Ayers, who led off the economic forecast with an overview of the state’s prospects this year. Ayers, who is dean of UGA’s Terry College of Business, presented a rather rosy forecast.
“Jobs are going to be plentiful. We expect home prices on average to rise to all-time highs (statewide). And most importantly, once again the state of Georgia will outperform the nation in terms of its economic growth,” he said.
Ayers said the Selig Center is predicting that Georgia’s gross domestic product — the value of all goods and services produced — will grow by 3.2 percent this year, up from an increase of 2.6 percent last year, with the U.S. pegged at 2.5 percent overall growth.
Unemployment, meanwhile, should improve, with the state averaging around 4.8 percent in 2017. That’s below 5 percent, which economists typically consider “full employment” because not all people wish to or need to work. The last time Georgia was at full employment was a decade ago.
“In terms of personal income growth, this year we expect a rate of 5 percent,” he said. “Last year we estimated the growth rate at 4.6 percent. So this is going to be a good year.”
While Ayers’ optimism is buoyed by prospects for more economic development projects, there also will be more leverage generated around the housing recovery, with it generating jobs and spending. And Georgia’s population growth is expected to take on a faster pace and once again be an economic driver for the state.
“We’re also optimistic for 2017 because there should be less gridlock in Washington,” said Ayers, not mentioning Donald Trump by name or his November election to the U.S. presidency. “There’s an opportunity to implement policies and tax reform and regulatory relief and spending on productivity and enhancing infrastructure. With all of those things, there’s an opportunity to benefit the economy. If our leaders get it right, the country and our economy will both benefit substantially.”
The flip side of any enthusiasm, Ayers said, is tempered by possible uncertainty generated by that same administration in Washington and its yet-tested ability to break through potential gridlock. He said a trade war with other nations is something that the U.S. should avoid because of the potentially devastating impact it could have on those companies in Georgia and other states that export products.
Other wild cards include a strong U.S. dollar and weak foreign economies, which would make it more difficult for Georgia businesses that sell goods overseas. Higher oil prices and a projected Federal Reserve interest rate hike this year of three-quarters of 1 percent — which could pinch consumer borrowing and spending — also could factor into how 2017 turns out.
For all of those reasons, Ayers said the Selig Center for Economic Growth is projecting a 35 percent chance for recession this year. A year ago, it gave odds of 25 percent for a severe downturn.
But the possibility of recession aside, Ayers said 2017 should be a solid one for Georgia and its citizens overall. He noted that Site Selection magazine has ranked Georgia the top state in which to do business.
“The main reason we’re optimistic for Georgia is the large number of business expansions and relocation (from other states) that have been announced in 2016 and the preceding years,” he said. “As these projects are built out, they’re going to provide a powerful tailwind for the state’s economy and will benefit the state in 2017 and subsequent years.”