What is the economic outlook for Georgia this year? 5 key takeaways for Columbus

Economists say the state’s economy may experience a slowdown in 2024 but will likely avoid a recession.

Business and civic leaders in Columbus who attended the University of Georgia’s Economic Outlook Tuesday heard the 2024 economic forecast for Georgia and the Columbus region from experts about job growth, inflation and other factors that could impact the financial picture.

Benjamin Ayers, dean of the Terry College of Business at the University of Georgia, delivered the state’s forecast. And Deborah Kidder, dean of the Turner College of Business at Columbus State University, provided the forecast for the Columbus region.

Here are five key takeaways from the economic outlook.

Slow economic growth, but less inflation

Nationally, there’s a 40% chance of recession, according to the outlook. In Georgia, there is about a one-in-three chance of recession, Ayers said. This risk of recession is not particularly low, he said, but it’s also not high.

The gross domestic product (GDP) in Georgia is expected to grow at a rate of 1.1%, Ayers said, compared to 3% the previous year.

Economic growth in early 2024 will be slow, according to the outlook, but the nation’s labor market should be strong enough to prevent a recession. However, the U.S. economy is vulnerable to something going wrong, like an energy-price shock, stock market crash, fiscal or monetary policy mistake or NATO being drawn into a war.

Inflation is expected to slow to around 2.5% in the second half of the year, Ayers said, which declined from about 8% in 2022 to around 4% last year. “

Most of the supply side and demand side drivers of inflation have improved,” he said.

Job growth and a tight labor market

Since the pandemic, employers struggled to reload workforces at times, Ayers said. “There were sometimes more than two job openings for every unemployed worker,” he said.

Difficulties in hiring workers coupled with recognition that the labor market would remain tight over the next decade meant that employers continued to hire despite the Federal Reserve raising interest rates and sales slowed, Ayers said.

This pattern should continue in 2024, he said, as employers limit layoffs. Instead, employers will likely reduce hours worked and shuffle job duties.

In Columbus, job growth is expected to slow, Kidder said, but not stop.

The region will continue adding jobs in 2024 because of several economic development projects that will provide momentum. One example is Pratt & Whitney, which specializes in aircraft and helicopter engines, investing in a $206 million expansion that is expected to bring about 400 jobs to Muscogee County.

Slow population growth

One of the biggest challenges for Columbus is slow population growth, Kidder said.

“Half of the jobs out there aren’t being filled because we have people who are taking off and moving to Atlanta or Auburn or somewhere else,” she told the Ledger-Enquirer. “And what we need is either people staying here or new people coming in.”

One way the city can slow or potentially reverse this outflow is by creating more high-paying, tech jobs, she said. High-tech employment accounts for only 2.6% of employment in the Columbus-area, Kidder said, compared to 5.5% of the nation’s.

“I think that, at the moment, out-migration is a concern at the college-age level,” she said. “But I think that we also are on a good trajectory in terms of being a destination city and bringing in these new projects that are going to bring well-paying jobs.”

One project, the Chattahoochee Hub for Innovation and Production of Semiconductors (CHIPS4CHIPS), announced Tuesday that the semiconductor manufacturer Micromize will bring its headquarters to Columbus.

The goal of CHIP4CHIPS is to support the growth of the semiconductor industry in the Muscogee County area. It was formed after Congress passed the CHIPS Act in 2022 to increase domestic manufacturing.

Expectations regarding real estate

The single-family housing market was in a recession for most of 2022 and 2023, Ayers said.

Higher mortgage rates and home prices reduced housing affordability significantly, he said. Permits to build new single-family homes are expected to increase slightly in 2024, he said, but at depressed levels.

In contrast, permits to build multi-family homes are expected to drop.

Home prices in Georgia are expected to drop about 5%, Ayers said, and it’s worth noting that housing prices fall slowly.

“The sharp price declines that we saw in the wake of the Great Recession is the exception rather than the rule,” he said. “The fundamentals of supply and demand are very different now than they were prior to the Great Recession.”

Area homes in Columbus are not significantly overvalued, Kidder said, so are unlikely to decline.

Consumer spending and savings

Consumer spending is a key economic driver in Georgia and the nation, Ayers said, along with savings.

Overall, consumers still have about $1.8 trillion of the $2.6 trillions saved during the pandemic, he said.

Older, higher-income and higher-wealth individuals were able to save more during and after the pandemic. These savings will help ensure consumer spending will continue despite the projected slowdown in 2024.

As the economy slows, there will be more late payments and bankruptcies, Ayers said, but only to levels considered normal prior to the pandemic. Most households will be in a good position to take on and service additional credit.

An annual survey done by the Butler Center for Research and Economic Development found that slightly more than half of Columbus residents and businesses surveyed felt they were as good or better off economically than last year, Kidder said.

Because Columbus is in Georgia with businesses like Aflac in its community, she said, the economy here is more stable than other regions.

“Columbus is a hidden gem with incredible opportunity,” Kidder said. “But right now we’re riding the wave of the slower economy that’s facing the nation."

This story comes to GPB through a reporting partnership with The Ledger-Enquirer.