The Columbus metro area is expected to create roughly 1,000 jobs in the coming year, while home prices should rise slightly even with a persistent out-migration from the area and the lack of growth in high-wage jobs.
Those were critical pieces of the forecast delivered in Columbus Tuesday by Jeff Humphreys, director of the Selig Center for Economic Growth. His appearance was part of the University of Georgia’s Terry College of Business “Economic Outlook” road show that crosses the state each year.
Held at the Columbus Convention and Trade Center, local community and business leaders listened as Humphreys followed Terry College Dean Benjamin Ayers on the stage, the latter speaking on the prospects of the Georgia and U.S. economies.
“The outlook for 2019 is positive,” Ayers said off the bat. “Georgia’s economy will continue to expand and it will grow faster than the nation’s economy for the sixth straight year. The good news is economic growth will be widespread and will be very well balanced. We are predicting job growth in each of Georgia’s 14 major metro areas and in each of our major industries, and that is positive news across the state.”
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For Columbus, Humphreys noted, the 1,000 jobs expected to be created in 2019 would follow about 1,200 jobs generated in the metro area last year and 700 jobs in 2017. Those private-sector numbers do not include Fort Benning, which he said makes up about 36 percent of the local workforce.
Humphreys ticked off several factors that make him “optimistic” for Columbus over the coming 12 months. Those include growth at Fort Benning and the fact that as Georgia and the U.S. economies grow, the metro area and its local counties should as well.
The Selig Center director also said industries that are expected to do well elsewhere should buoy the Columbus economy, which is heavily reliant on finance-sector and leisure industry jobs. There also appears to be more entrepreneurial activity of late in Columbus, he said, while the metro area also doesn’t depend heavily on the manufacturing of products for export, a factor that should ease any sting should a global trade war break out.
“Another positive is the cost of living and doing business is quite low, and the quality of the workforce is improving,” Humphreys said of Columbus before turning to the flip side of his outlook.
“There are some negatives,” he said. “The main negative is actually out-migration. If you look at migration for this area, more people are leaving than are coming in. Another negative is below-average levels of educational attainment. Columbus also has a low proportion of high-tech jobs and the economy is relatively undiversified. Of course, that’s mostly because of the presence of Fort Benning.”
As Fort Benning goes economically, he said, so do the fortunes of Columbus. That has worked against the area in past years as budget-driven drawdowns took place, he said, while the current climate in funding the U.S. Department of Defense, and the U.S. Army in particular, indicates troops levels should rise into 2028. Of course, rising federal deficits are the wild card there, he said, and could prompt more cuts in coming years.
Closing his comments and centering on the Columbus housing market, which includes both sides of the Chattahoochee River in Georgia and Alabama, Humphreys, as in years prior, noted that the Great Recession housing bust was much less severe initially in Columbus than Georgia and the nation as a whole. But recovery has taken much longer in the areas of construction and prices.
“So you didn’t plunge off the cliff the way the state did, but the downward trajectory went on for quite a while. In fact, single-family homebuilding in Columbus remained in recession through 2016,” he said, pegging Georgia’s recovery starting in 2011.
“I expect we’ll see a continued increase in homebuilding activity in 2019,” the Selig Center director said of Columbus. “The shift in homebuilding from an economic headwind to a tailwind is very important because it’s really difficult to sustain a broad-based economic expansion in a local economy if the homebuilding industry is not on board.”
In terms of home prices, Humphreys again said the Columbus area did not tumble as far as the state during the housing bust just over a decade ago. Prices dropped locally about 16 percent, he said. However, they have been very slow to recover, stalling out in 2014 and 2015 before pushing a bit higher starting in 2016.
Today, he said, Columbus-area home prices are still down about 8 percent from the pre-recession peak, which means they have rebounded only about halfway from their 16-percent decline. Statewide, the average home price is now up 14 percent from the pre-recession peak.
“I think the reason for that is primarily Columbus hasn’t created enough corporate middle-class jobs to push up home prices,” Humphreys said. “In other words, you have created jobs, but not a lot of high-wage, high-income jobs, the kind of jobs that really give an extra push to the prices of owner-occupied housing. In fact, last year prices were only up about 1 percent in Columbus. I do think in 2019 you are going to see an increase in home prices, a modest one.”
Ayers, in his presentation on Georgia, said the state’s economy should grow 3 percent this year, down slightly from 2018. He and the Selig Center project a 1.5 percent increase in employment in 2019, which he said would be higher than the 1.3 percent expected of the nation as a whole.
Personal income growth in Georgia should climb 4.9 percent, he said, down slightly from 5.4 percent last year.
While every metro area in the state should experience upward growth in 2019, he said, Augusta and Gainesville will see the fastest job growth, followed by Athens and Atlanta. Albany will be at the bottom of the 14 metro areas in terms of job growth, he said.
Those wondering about the prospects of a U.S. recession in 2019 might find some comfort in Ayers’ prognostication, with he and the Selig Center saying the risk now stands at about 25 to 30 percent for this year.
“Absent a full-blown trade war, the risk of a 2018 recession is low,” he said. “And if we can avoid a major shock or policy mistakes, the current expansion could continue for some time.”