Economic recovery in the Coastal Georgia region is expected to build momentum throughout 2010 and into 2011, according to economic experts from Georgia Southern University.
The Bureau of Business Research and Economic Development (BBRED) in GSU's College of Business Administration anticipates 2010 will be a “period of transition” as the economy recovers from the “free fall” conditions of late '08 and early '09 and moves toward a sustainable period of recovery.
Ed Sibbald, GSU's director of the Center for Excellence in Financial Services and the director of BBRED, said that though the recession ended last summer and the economic growth was good in the last half of '09, the positive impact of that growth won't be widespread until later this year.
“The problem is that most people in Main Street America — families, individuals and small businesses — haven't felt the effect of (the economic recovery) yet and probably won't until about mid-year,” Sibbald said. “For manufacturing and service companies, the key to whatever improvement they had in 2009 was productivity, without question. Using technology and, regrettably, also using outsourcing. For financial companies, their recovery was in terms of very low interest rates and the fact that they could get larger spreads then they could normally get.”
BBRED predicts the national economy will grow slowly and gather steam later in the year, with real GDP growth projected at 2.3 percent in 2010 and 2.8 percent in 2010, falling short of the 3.0 percent long-term average growth rate for the U.S. economy. They also predict Georgia's economy will recover slower than the national average, due to its above-average reliance on weak economic sectors such as real estate, real estate related materials manufacturing and financial services.
The economic growth for the coastal region is forecasted to fall somewhere between the state and national rates, due to an economic base that is more diverse than the state overall. The Savannah Metropolitan Statistical Area (MSA) has an attractive blend of healthcare, military, education, tourism, logistics and transportation (The Port) and manufacturing, while Bulloch, the state's second largest country, has a solid, stable base in education, healthcare, retail distribution and manufacturing - all of which accounts for a brighter outlook for the area.
According to the report, unemployment rates for Bulloch County (8.8 percent) and Savannah MSA (7.7 percent) are currently below the state (10.2 percent) and national (10.0 percent) rates. The BBRED expects both areas to remain 1.0 to 1.5 percent lower than state and national averages though 2011.
“I think we've stopped the bleeding in terms of unemployment,” Sibbald said. “We've dropped from an average loss of 500,000 - 600,000 jobs per month, down to the point we saw a slight positive figure in November and a slight negative figure in December. We expect jobs to start growing again - actual gains in monthly jobs -somewhere between February or March.”
The attractive combination of low construction costs, an educated workforce, a diversified economy and the historical ambience of Savannah will permit the region to fully participate in the recovery phase of the business cycle and maintain lower than average unemployment rates.
Sibbald said the BBRED does not see inflation as a big concern in the coming months because consumers are saving rather than spending, there is very little upwards wage pressure on business and industries are below full capacity. He also said that, barring a major external shock such as oil price surging to $150 per barrel, interest rates should also remain low and support a favorable environment for home buying.
Sibbald talked at length about the economic report on Tuesday's “Morning's unPHILtered” radio program. His entire interview can be heard on the archive pages at www.BoroLive.com