ATLANTA – The recession prompted by the coronavirus pandemic is likely over in Georgia, but the state remains far short of a full recovery, a University of Georgia economist said Thursday.
Georgia is on track for an economic growth rate of 4% next year, outperforming a national growth forecast of 3.5%, Benjamin Ayers, dean of UGA’s Terry College of Business, said during the university’s annual economic forecast. The event, usually held at the Georgia World Congress Center in downtown Atlanta, was livestreamed this year.
“Full recovery of the economy will arrive sooner in Georgia than in the United States,” Ayers said. “In Georgia, there’s relatively less economic debris to clean up.”
Ayers said consumer spending and a booming housing market will be key drivers in Georgia’s economic recovery. Logistics, distribution, business services, financial technology, education and health services are expected to return to full employment most quickly.
Jobs in entertainment and hospitality may see some of the fastest recoveries, but those industries are coming back from a near all-time low, he said.
With entertainment and hospitality ground to a standstill by the pandemic for much of this year, Georgia’s economy is expected to contract by 3.7% by the end of 2020.
However, the strong growth projection for next year means this year’s losses should be recouped by the end of 2021.
UGA’s forecast, developed by Terry College’s Selig Center for Economic Growth, is based on expectations that an effective COVID-19 vaccine will be widely available by the middle of next year.
As a result, Ayers said, most of the 2021 economic recovery will come during the third and fourth quarters of the year. Until then, Georgia still will be plagued by public anxiety over the virus, slow wage growth and low demand for entertainment services including restaurant dining and movie theaters.
“We are in the second phase of the recovery currently, which is an extended period of choppy economic growth that will linger until a vaccine is widely available,” he said. “It’s going to be a slog to get back to a period of steady, above-average economic growth.”
Ayers predicted a homebuilding boom next year, driven by low mortgage rates and the desire for larger, nicer homes on the part of current homeowners who have been cooped up for months.
However, commercial construction is not expected to share in that boom because the market is still absorbing an ample supply of existing retail and office space, he said.
Ayers said another factor buoying Georgia’s growth prospects is the likely culmination of major economic development projects now in the pipeline.
“Nine of the 10 largest projects announced in the first three quarters of 2020 were announced after the COVID-19 shutdown began,” he said. “This success reflects many factors that make Georgia a great state in which to do business.”