Monday, June 24, 2013

Georgia’s growth flattens in May

After adding more than 28,000 jobs over the first four months of the year, Georgia’s job growth flattened in May, recording a small 700 drop in nonfarm jobs on a seasonally adjusted basis, according to the U.S. Department of Labor’s Bureau of Labor Statistics.

Gains in Professional & Business Services (2,400) and Education & Health Services (2,200) were offset by losses in Manufacturing (-2,600) and Government (-2,500).

Business & Professional Services remain the outstanding sector, rising 0.4 percent over the month and recording a 5.3 percent growth rate over the past 12 months, an increase of 29,600 jobs.

Leisure & Hospitality gained only 400 jobs in May, but has risen 4.5 percent over the year, up by 17,800 jobs. Education & Health Services is up by 3.1 percent since May 2012.

Manufacturing employment has declined steadily in the state since the first of the year, and there are now 6,300 fewer manufacturing jobs in Georgia than in December 2012. Over the past 12 months, the sector has lost a net of 2,300 jobs.

The losses in Government in May partially offset gains recorded in April even with an upward revision in the number of Government jobs gained in April as revised data came in stronger than originally indicated. Since last year, Federal Government employment has declined by 2.8 percent in the state, while State and Local Government also continues to record decreases over the year.

The Construction sector lost 1,600 jobs in May, although it is still 2,300 jobs above its level in May 2012, a gain of 1.6 percent.

Data for April were revised upward, showing a revised increase in April showing that the state gained 500 more jobs in April than originally estimated.

Estimates of the latest numbers from the U.S. Census indicates that Georgia is gaining population at a rate of 9,000 people a month or 1.1 percent.

Estimating that the state needs to add between 44,000 and 58,000 jobs annually to keep up with rising population, Georgia is on track to exceed that number this year despite the slowdown in May. The state continues to create jobs at about the same rate as the nation.

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Friday, June 14, 2013

Is Georgia’s future in Arts and Entertainment?

Can the state that is known for agriculture and low wage services become an entertainment center?

The Georgia Department of Labor has set out industry projections to the year 2020 that has the Arts, Entertainment, and Recreation sector as the state’s second fastest job growth area after health care.

Yes, the state has major league teams, and yes, Atlanta has a symphony orchestra, an opera company, and live theater, but is the state’s future in entertainment and the arts?

According to state labor department projections, jobs in arts, entertainment, and recreation will increase by more than 24 percent over the next 10 years.

The state is already seeing growth in this sector thanks to tax credits, which are encouraging movie and television production here in the state.

Reports say that in the last fiscal year, productions filmed in Georgia generated an estimated $3.1 billion in economic activity, a 29 percent increase from the year before, according to state estimates.

As a result, several companies have announced that they are building new sound stages in the state to accommodate film and television production.

In an Associated Press article in April, Matt Forshee, president of the Fayette County Development Authority was quoted as saying that these new production facilities “…takes the state to a whole new level. When you look at the films that have filmed in Georgia, for the most part, they have been smaller budget films, in the range of $20-25 million.

This allows us to open up to larger budget productions, which means more expenditures occurring within the state, which becomes a bigger return on the investment on the state level for the tax credits.”

Of course, the sector includes a lot more than film studios.

Georgia Department of Labor lists “Hot” jobs in this sector as including Graphic Designers, Public Relations Specialists, Producers & Directors, and Sport Coaches and Scouts.

These are jobs that require creativity and innovation, and artistic skills. Part of what some are calling the new Creative Class.

Preparing for these jobs requires the state’s university system to focus on new areas. In Georgia, the majority of college degrees are in business-related subjects, with a sizeable number in elementary and secondary teaching.

Graphic design, film studies, and public relations programs exist in the state, but at no where near the level of business courses. Where these courses are found, classes that stress creativity are often given second class funding.

If the projections are correct, are Georgia’s schools getting students ready for the right careers, or are they preparing for the past rather than the future?

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Monday, June 10, 2013

Georgia: How you have changed in 10 years

Back in 2002, Georgia was coming out of its recession, and the University of Georgia’s Jeffrey Humphreys was predicting strong growth with an emphasis on emerging high-technology companies, air transportation (read Delta Air Lines), and the hospitality sector in the Atlanta area.

Times have changed. It is unlikely that Dr. Humphreys saw that the coming recovery would lead to an even larger recession five years later.

Now, 10 years later, the state has survived a massive downturn in its economy and again appears to be on the rebound.

While population continued to grow over the 10-year period, adding more than 1.2 million new residents, the state has been able to add only 55,000 new nonfarm jobs.

This disappointing job growth can be directly related to the Great Recession. From 2002 to 2007, the state grew nicely, but then declined sharply with the number of jobs in the state dropping five percent since 2007, despite increases in the state's population. This drop since 2007 offset much of the earlier job gains made between 2002 and 2007.

As happens, job losses did not affect all sectors equally. The 10-year period has seen a continued shift from goods-producing industries (such as construction and manufacturing) to service-providing companies as evident in the growth of education and healthcare employment in the state.

Construction, which was doing so well until the latest recession hit, has suffered a net decrease of 56,800 jobs from 2002 to 2012, all of which and more were lost between 2007 and 2012 (down 80,200 in that five-year period).

More interesting, manufacturing, which was slipping even before the most recent recession, has lost almost as high a percentage of jobs as construction over the past 10 years, giving up 24.7 percent of its jobs compared to construction’s loss of 28.7 percent. It is just that the construction losses occurred over a shorter period time and thus were more dramatic.

And what about Dr. Humphreys’s concerns in 2002 about the three legs of the Atlanta economy (high-tech, air transportation and hospitality), which he regarded as the cornerstones of Atlanta's economic future?

High-tech, as represented by the information sector, has shrunk in the state almost as much as construction or manufacturing, dropping 22 percent.

No doubt, a portion of that decline has been the drop in fixed-line telecommunications jobs, but no one would say that high-tech has been the economic savior of the Georgia economy that was hoped for in 2002.

As for air transportation, that also has barely held its own since 2002, down 700 jobs. Airlines, such as Delta, have done well, but that has not been reflected in their employment levels in their hometown of Atlanta.

In contrast, leisure and hospitality jobs have been a bright spot. The sector has added more than 54,000 jobs over 10 years, a gain of almost 16 percent. Dr. Humphreys was very correct about this sector’s rebound after the 2001 recession.

Education and healthcare has been the brightest star for Georgia, adding 123,000 jobs, a growth rate of 33 percent.

In all, the state finds itself clawing back from a remarkable economic downturn but also a state that has found its salvation so far, not in its agricultural and manufacturing roots, nor in its embrace of high-tech.

Its past has not provided the needed boost, but neither has the vision it had of itself 10 years ago.

Instead, growth has come from its education, healthcare, leisure and hospitality industries and services to businesses.

It turns out that the state's future laid somewhere between its low-tech past and its high-tech dreams.

How far those sectors can take us remains to be seen.

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Monday, June 3, 2013

Georgia’s Non-Metro Areas in April: A reversal of fortunes?

One of the most expected results when looking at Georgia’s employment trends has been that job growth has occurred in metro areas of the state, led by the Atlanta area.
In December 2003, the 14 metro areas tracked by the U.S. Bureau of Labor Statistics had a combined employment of approximately 3.3 million out of the state’s total of 3.9 million, or roughly 85.4 percent of the state’s employment with the rest of the state making up the other 14.6 percent.
Even with the recession, the metro areas actually lost employment at a slower pace than the rest of the state. By December 2012, the metro areas had increased their share of the state’s employment to 87 percent.
The Atlanta metro area was a big contributor to this rise. In 2003, the metro area contained 58 percent of the state’s nonfarm jobs, while by the end of 2012 that percentage had risen closer to 60 percent.
Beginning in February 2013, that trend seems to have reversed partially. Since the beginning of the year using seasonally adjusted data, the state has gained 28,200 jobs. Of those, 9,500 were in the Atlanta metro area, while the other 13 metro areas in the state have actually lost 800 jobs.
In the meantime, the rest of the state has added 19,500 jobs, offsetting the losses in the metro areas. This is not a one-month result but rather the result of data in February and April.
In February metro areas lost 4,100 jobs while the rest of the state added 6,400. In April, the metro areas reported a combined increase of only 700 jobs, while the rest of the state reported an increase of 3,600 nonfarm jobs.
Part of the metro areas’ small gain in April can be attributed to the Atlanta area, which saw a 1,200 job drop over the month, virtually offsetting job gains in other metro areas around the state.
Is this a statistical fluke? After all, the April data are preliminary, and this could be wiped out next month when the data are updated.
Or, are we seeing the beginning of a reversal of the long held urbanizing trend in the state?
Could the rest of the state be growing faster than the metro areas at long last?
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The U.S. Bureau of Labor Statistics currently tracks 14 metro areas in Georgia. They are:
Albany, Athens-Clarke County, Atlanta-Sandy Springs-Marietta, Augusta-Richmond County,
Brunswick, Columbus, Dalton, Gainesville, Hinesville-Fort Stewart, Macon, Rome, Savannah,
Valdosta, Warner Robins

Because metro areas can cross state boundaries, many of these areas include some employment that is actually outside Georgia. The Columbus metro area, for example, includes a part of Alabama, Augusta includes a portion in South Carolina, etc. Nevertheless, while a portion of this employment is outside the state boundaries, most of the employment in these metro areas can be correctly attributed to Georgia.