by Amy K. Lavender
The West Georgia Regional Update, released recently by the University of West Georgia’s Center for Business and Economic Research, had good news for the six counties that make up the region: west Georgia’s economy is recovering and growing.
The report, which covers Carroll, Coweta, Douglas, Haralson, Paulding and Polk Counties, highlighted new trends in the labor market, local industry and the housing market.
An overview of the economic status of the region was outlined by UWG’s Chair of Economics Dr. William J. Smith at the annual Economic Forecast Breakfast recently. Of course, the topic on everyone’s mind was job creation.
1. Unemployment Claims are Dropping
“We’re seeing initial unemployment claims at a level we haven’t seen since before the recession,” Smith said. “While we were seeing around 1,500 or 1,600 claims, right now we’re sitting right on 1,177. That’s a substantial reduction—close to where we were before the Great Recession—and this is a leading economic indicator that shows us where we’re headed, not where we’ve been.”
Smith explained that job growth has been slow to start simply because companies are experiencing risk aversion. He said it’s a bit of a Catch 22: employers are worried that there isn’t enough growth, so they don’t add jobs; and as long as there are enough companies not adding jobs, the economy doesn’t grow very rapidly.
2. Our Area is Growing
However, despite this, job growth is on the upswing in all six counties. The only county that is behind in growth is Coweta, but it was not heavily affected by the recession and only experienced a small amount of job losses. As a result, they have less ground to regain in that area.
“We’re entering a point where the unemployment rate is near where we were before the start of the recession. West Georgia’s at 5.1 percent, and the state is at 5.3 percent. Last year we were at 5.6 percent, so we’re a full half percent lower in the unemployment rate than we were last year.”
Coweta and Paulding reported the lowest unemployment rates in the region, but all six counties maintain a rate below 6 percent. Simultaneously, the labor force has been growing. Smith said this is a key factor for growth.
3. Industries are Creating More Jobs
“If you look at the unemployment rate along with the labor force, the labor force has been rising, the unemployment rate has been falling, and this is the direction we’re looking for. This is showing improvements. Only county in the region not showing an upward trend in the labor force is Polk County, but it’s showing a much stronger decline in the unemployment rate.”
What all this means, Smith said, is that our area is creating jobs.
“Once we finally started seeing growth, we’ve been positive ever since,” he said. “Last year, we posted a job growth of 6,475 over a six-county area, and we’re expecting to create 3,000-3,500 jobs next year and about 3,000 after that.”
The sectors that have seen growth in recent months are the service providing sectors: healthcare, goods-producing and manufacturing. Smith noted that incomes are also rising again. However, some concerns are still looming overhead, like the auto sector deceleration, lingering effects of the drought and shortage of mid-level housing. In fact, housing was a popular topic at the event.
4. The Housing Market is Improving
Dr. Thomas J. Cunningham, chief economist for the Metro Atlanta Chamber of Commerce, spoke on Atlanta metro real estate.
“The housing market is getting better, which is a good indicator of economic recovery,” Cunningham said. “However, the supply of homes is low. We’ve had 49 straight months of below normal supply because there isn’t a lot of new construction going on. Only one in 13 homes sold are new construction. So there’s a shortage there and inventory is tight, even in west Georgia. But west Georgia had a good year in real estate: $1.3 billion—that’s up 30 percent. Prices are recovering, and continued growth is expected.”
Chief Economist at Realtor.com Jonathan Smoke echoed this sentiment, saying growth is expected and the market is getting better, but that mid-level housing supplies are falling short.
“Unfortunately, new construction hasn’t been enough because the one characterization of the real estate market over the last several years is that we haven’t had enough supply,” Smoke said. “In fact, if you talk to the realtors in the room they will tell you they would have sold more homes this year if there had been more homes to sell.”
However, the positive aspect of this, Smoke explained, is that our economy isn’t experiencing the glut of homes for sale that stymied the recovery.
“On Realtor.com, every month we’ve had fewer homes for sale than the previous month and homes are sitting on the market for shorter amounts of time,” Smoke said. “So we aren’t experiencing those same issues we were facing just a couple years ago where homes were sitting on the market for months at a time, sometimes over a year.”
Smoke also shared that demand for homes is strong due to low interest rates. He wrapped up his portion of the event forecasting some positive outcomes for the real estate market.
“Based on the demographics, the age group who are now starting buying homes is the largest population since the Baby Boomers, and this is going to cause a tail wind that we will be riding for the next decade.”Posted on