Georgia Benefiting from Tailwinds of Domestic Migration, EV, & Manufacturing Investment, Offset by National Headwinds of Corporate Job Compression & Weak Global Growth

Rajeev Dhawan

Thursday, February 29th, 2024

Georgia’s economy is benefiting from the tailwinds of people moving to the state from the rest of the nation (domestic net migration), electric vehicle (EV) and supplier-related construction, and general manufacturing investments, while also being buffeted by the headwinds of national job market compression and global growth woes, according to Economic Forecasting Center Director Rajeev Dhawan of Georgia State University’s J. Mack Robinson College of Business. 

“Georgia created 162,500 jobs in calendar year 2022 (Q4 to Q4), but job growth slowed to 100,200 in calendar year 2023, with 80 percent of the job gains in lower-wage-paying sectors (e.g. hospitality, retail, social assistance, gig economy, and most of healthcare) that also produce part-time jobs with low consumer purchasing power,” Dhawan said today (Feb. 28) during his semi-annual Economic Forecasting Webinar for Atlanta and Georgia. 

“By contrast, high paying catalyst sector jobs ‒ professional and business services (corporate), wholesale (business-to-business), information technology, and finance ‒ which are the trigger point for the growth multiplier process, underperformed in 2023. These four sectors together produced 40 percent of the job growth the state saw in 2021 and 2022. But in 2023 their combined contribution was less than 5 percent,” Dhawan said. “It’s not just the absolute number of new jobs created that matter, but also the quality of jobs – driving everything from income growth to consumer spending and ending with tax collections. For example, net sales tax collections were up by just 0.2 percent (year-over-year) in January 2024 compared to double digit growth in late 2022.” 

“The drumbeat of layoff announcements at big companies in the last three months – UPS, Delta Air Lines, Truist, Newell Brands, Norfolk Southern, The Home Depot, and Block Inc. among them – doesn’t augur well for the job prospects in the corporate sector, which will have a ripple effect on the rest of the economy.” 

The anticipated layoffs by big technology firms also will be felt in the Atlanta metro area. Although it may be more of a problem for West coast metro areas where these firms are headquartered (from San Diego to Seattle), the companies have satellite offices here concentrated in the core counties of Fulton, Cobb, DeKalb, and Gwinnett. The ripple effect on non-tech businesses is also expected here: Many large corporations with global reach that are headquartered in the metro area will deal with the pain of anemic revenue growth by paring headcount. 

Although Georgia’s hospitality sector has continued to boom, overall caution in the corporate sector could slow spending for meetings and conventions in the Peach State, Dhawan warns.

“Two trends are helping Georgia’s economy weather the economic slowdown better than the nation: Large, positive domestic migration numbers, and EV/manufacturing buildup. More people coming to the state are boosting spending over and above what job growth numbers imply,” Dhawan said. “Georgia gained 58,000 people in 2023. By contrast, California lost 338,000. That said, migration numbers moderated almost 30 percent from 81,000 people in 2022.” 

“The state’s EV manufacturing boom, currently in its building stage, will benefit areas throughout the state, particularly on the periphery of metro Atlanta and Savannah,” said Dhawan. “This is also good news for the construction industry, which provides workers and construction materials, especially cement and lumber among others. Once the EV plants are online, it will lead to hiring in the manufacturing arena in the 2025-2026 time period.”

“Myriad global factors are clouding growth prospects,” Dhawan said. “The German economic machine is not firing on all cylinders, which, when combined with the Russia-Ukraine situation, makes European growth prospects less than rosy in coming years. China has been unable to jumpstart its economy since getting rid of its zero Covid policy last year, and the bursting of the nation’s massive property bubble will have its own repercussions on their growth, and the growth of surrounding countries who are our trading partners, including Japan, Korea, Malaysia, and Indonesia. Then, there’s the Middle East turmoil. The current geopolitical mess could cloud my projections for normalcy in 2025.”

Highlights from Rajeev Dhawan’s Economic Forecast for Atlanta and Georgia

  • Georgia jobs: The state added 100,200 jobs (12,200 premium jobs) in calendar year 2023, but this rate will moderate sharply to 37,400 jobs in 2024 (6,800 premium). In 2025, the state will add a better 79,100 jobs (20,100 premium) and 101,300 jobs (29,100 premium) in 2026.

  • Georgia’s nominal personal income will grow 5.2 percent in 2024, a higher 5.7 percent in 2025, and again by 5.8 percent in 2026.

  • Atlanta jobs: The metro area added 61,700 jobs (6,800 premium) in 2023, but will add an anemic 26,100 jobs (4,300 premium) in 2024. As recovery takes hold in 2025, the metro area will add a respectable 56,700 jobs (14,500 premium), and 73,900 jobs (21,800 premium) in 2026.

  • Atlanta housing permitting activity decreased by 18.7 percent in 2023; single-family permits dropped by 7.8 percent, and multifamily permits even sharper by 31.2 percent. Total permit numbers will fall by 5.4 percent in 2024 as multifamily permits drop again by double digits. In 2025, total permit numbers rise by a miniscule 0.5 percent but multifamily permits drop by 3.0 percent. Normalcy will return in 2026 when permit activity grows by 10.8 percent.