The COVID-19 recession in Georgia is over.
So says the annual economic forecast from the University of Georgia’s Terry College of Business. Now comes the hard part: the recovery.
In a streamed presentation of the forecast, Terry College dean Ben Ayers said the claim rests on a few optimistic assumptions. One, that the state sees no future pandemic lockdowns; two, that people will continue spending money on new houses, goods and services; and three, that the federal government will provide more COVID-19 aid money — much more.
If those pieces come together, Ayers said Georgia will have an easier time than much of the rest of the country making up the 4% contraction of the state’s economy than will the U.S. in general.
“In Georgia, there's relatively less economic debris to clean up,” Ayers said “In addition, many of the factors that caused Georgia to outperform the U.S. economy prior to the pandemic are reasserting themselves.”
Ayers highlighted consistent inmigration to Georgia from other states and successful industrial recruiting as reasons Georgia might outperform other states.
Keeping Georgia out of a new lockdown is up to Gov. Brian Kemp. But other virus-related slowdowns might not be. According to epidemiologist and COVID-19 watcher Amber Schmidtke, the state is now at the same seven-day case rate as at the peak of the summer surge. And winter-like weather has just begun.
The amount of federal aid needed nationwide for Ayers’ best-case scenario for Georgia will be unprecedented. In his keynote speech during the Terry forecast, David Altig, vice president and director of research at the Federal Reserve Bank of Atlanta, said the aid should ideally fall between $1 trillion and $1.5 trillion. Altig said that aid is key to keeping consumer spending on a steady simmer.
The final piece of the puzzle, Ayers said, and the thing that he expects to finally return Georgia to its pre-pandemic state of health, is the widespread adoption of a COVID-19 vaccine. But until then, he said things could be “choppy.”
Meanwhile, the effects of the recession on the vulnerable can still be seen with the naked eye, as in Valdosta where Eliza McCall of the Second Harvest of South Georgia food bank said food aid lines have at times stretched for miles. She sees no signs that will end anytime soon.
“What we're seeing also is a lot of first-time people — people who have never had to ask for help before are now having to come seek that food assistance,” McCall said.
Some of that need could be because parts of the Georgia economy never fully recovered from the 2008 recession. David Altig of the Atlanta Federal Reserve Bank said while low-skilled workers have disproportionately lost their jobs in the COVID recession, those job losses are piling up on middle-skilled workers, in construction or manufacturing, who lost the most jobs during the Great Recession.
“What happened in the last recession is still with us,” Altig said. “It means we have some major challenges associated with this pandemic.”
Challenges, he said, and also opportunities, such as ramping up education to give workers the skills they need to get back into the workforce.
Ayers said if all the pieces fall into place — consumer spending, federal aid and no hesitation in getting the COVID-19 vaccine — then Georgia will be back at 2019 economic health by the end of 2021.
In the meantime?
“It is going to be a bit of a slog,” Ayers said.
