Georgia has made a remarkable recovery since the last recession,
but the state is still vulnerable to any downturn in the national economy.
A decade ago, Georgia was mired in the national
recession.
In 2008, the state’s gross domestic product (the broadest measure of
economic activity) declined by more than 6%, and employment in the state fell
by 3.4%, a sharper decline than the nation.
Since 2008, the State of Georgia has seen a remarkable
recovery from the most recent recessionary period.
Over the past decade, the state’s real
(inflation-adjusted) GDP has grown by more than 23% to $588.17 billion.
State of Georgia GDP
Source: Federal Reserve Bank of St. Louis
Georgia Real GDP 2007-2018
Data Source: U.S. Bureau of Economic Analysis
Employment has risen by more than 13% even as the population
increased by 8.5% up to 10.5 million, due to a combination of births and
in-migration to the state.
Median household income has risen as well, growing from
an average of $46,227 to $56,183, an increase of 21.5%. Unfortunately, when
inflation is taken into account, median income reduces to a net gain of only
1.7% for the average household over the past decade.
Georgia Industries
Over the past 10 years, the largest industries in Georgia
have become more concentrated and core to the state’s economy.
In 2007, the year before the recession took hold, Georgia’s
four largest private sectors represented a total of 42.3% of the state’s
economic activity.
In 2018, these four sectors combined for 43.4% of the state's economy.
·
Manufacturing in the state has slipped from
11.3% to 11.0%
·
Information sector has declined from 8.6% to 8.2%
·
Real estate and rental and leasing has increased
from 11.2% to 11.9%
·
Professional and business services have climbed
from 11.2% to 12.3%
One area of note is the arts, entertainment, and
recreation sector. The industry recorded a significant increase in economic
activity over the decade, rising by more than 59% and now represents more than $3.57 billion in economic activity.
No doubt, the decision to encourage movie and television
production in the state through tax incentives has contributed to this rise, as
well as individuals’ interest in more leisure activities.
In contrast, the state’s agriculture, forestry, fishing and hunting sector continues to
shrink as a share of the state’s overall economic activity.
While the sector did rise by 4.8% over the decade, it
actually became less important to the state’s economy, dropping from 0.9% of
the state’s GDP in 2008 to 0.7% in 2018. In total, the state's agricultural interests represents $3.96 billion of economic activity in 2018.
2018 has seen a slowdown
Although growth has continued over the past decade, 2018 marked
a slowdown in the rate of growth, in terms of GDP, although employment growth
accelerated.
In 2018, the state’s inflation-adjusted GDP grew by 2.6%,
a decrease from the 2017 rates of 2.9%.
For the fourth quarter of 2018, state’s
inflation-adjusted GDP growth was 2.1%, slightly below the nation’s 2.2% growth
rate.
Source: U.S. Bureau of Economic Analysis
Employment in the state grew by 1.9% in 2018, more than
the 1.6% growth rate recorded for 2017.
As a comparison, the nation’s employment grew by 1.8% in
2018.
Looking ahead
Georgia has had a significant recovery since the
recession but remains dependent on many of the same industries that powered it
before the last recession.
Since the value of its largest sectors has increased
since the last recession, the state is even more dependent on these same industries’
health for its future growth.
Traditionally, Georgia does better than the nation in
employment growth during good economic times, and worse than the nation during
a downturn.
Data Source: U.S. Bureau of Labor Statistics
Despite employment growth, median household income
remains below the nation giving residents less ability to build up savings in
anticipation of any recessionary period.
At the same time, government, normally a reliable provider
of employment and income during recessions, has shrunk in the state making it
less of a counter-balance if the private sector begins to decline.
There is every reason to believe that if the nation goes
into another recession, the state’s economy and its labor force will disproportionately again
suffer.
