Georgia's Job Growth Rises Amid Gains in Service Sector; Standard & Poor's DRI Says Congestion, Pollution Hamper Long-term Growth

Business Wire, July 19, 1999

LEXINGTON, Mass.--(BUSINESS WIRE)--July 19, 1999--

Georgia will end the 1990s with another year of steady employment growth, but a slowdown in residential and commercial construction will restrain the rate of expansion in 2000, according to a report released today by Standard & Poor's DRI, the world's leading provider of economic information, forecasting and consulting services.

New engines of job growth may emerge in ambitious plans to lure high-tech industries to the state and to deepen Savannah's harbor to accommodate larger ships; however, the report found potential weaknesses in both proposals.

Total nonfarm employment growth is healthy but slowing, from 3.5% last year to 3.1% in 1999 and a projected 1.8% in 2000, according to the Standard & Poor's DRI forecast. The service sector, and financial services in particular, will maintain strong growth, but construction jobs will fall off sharply, from 6.6 % growth in 1999 to a 2.5% loss in 2000.

"Excessive residential growth and commercial overbuilding will finally begin to take their toll, leading to construction layoffs and making a severe dent in the economy," said Sara Johnson, chief regional economist for Standard & Poor's DRI and editor of its U.S. Markets Review. "That's the bad news. The good news is that the metropolitan Atlanta area is embracing regional planning to control development and deal with traffic congestion, and the state is working to create high-paying jobs in a new area: telecommunications."

Georgia launched a plan this year to lure high-tech companies, using the Georgia Center for Advanced Telecommunications Technology and a state-of-the-art fiber optics network that was installed for the 1996 Olympics. Engineering programs at Georgia Tech and other state colleges will be expanded. But Georgia currently has few high-tech companies and it must overcome a relatively weak reputation in that area, lest the state end up training workers for jobs elsewhere in the country.

A plan to dredge Savannah's harbor also has potential problems, according to the report. The $225 million proposal would deepen the harbor channel from 42 to 48 feet, yet some ships now require depths of 50 feet. Moreover, deregulation in ocean shipping rates could change current shipping patterns, with a few ports handling megaships and other ports acting as feeders.

Standard & Poor's DRI also forecasts that Georgia's population growth, which has provided the workers for its economic boom, will slow somewhat from about 2% a year between 1996 and 1998 to about 1.3% a year between 2000 and 2003 - dropping the state from third to seventh in the nation. But the decade-long influx of residents has created problems with congestion and pollution. In addition, the loss of federal highway aid could further exacerbate traffic problems and stall growth. A new Georgia Regional Transportation Authority, covering 13 counties, could put controls in place to keep growth on track.

The Georgia forecast is part of the Standard & Poor's DRI U.S. Markets Review, which provides detailed economic analyses and forecasts for all 50 states and the District of Columbia. The report includes information and quarterly projections for the next five years, covering statistics on employment, population, labor markets, income, prices, wages and other economic activity. Those interested in the U.S. Markets Review or any other Standard & Poor's DRI services should call the Client Resource Center at 1-800-933-3374.

Standard & Poor's DRI is headquartered in Lexington, Mass., and maintains offices in New York, San Francisco, Chicago, Atlanta and Washington, D.C., and outside the United States in Canada, Belgium, France, Germany, Italy, and the United Kingdom. The company also maintains strategic partnerships with firms throughout Asia and Latin America. Standard & Poor's DRI is a unit of Standard & Poor's Financial Information Services Group, which provides integrated insight and customized information to corporations and global financial markets.