Governor Nathan Deal said the accord reached in Washington Tuesday over the budget will play a big role in lifting Georgia’s economy. The budget deal will allow for increased domestic and military spending, and it lifts a veil of uncertainty for Georgia businesses.
He made the remarks in Atlanta Wednesday at an economic forecast event organized by University of Georgia’s Terry College of Business.
“I truly believe most of the blanket that has been on our economy in our state as well as the country as a whole has been the uncertainty that lingers out there on a federal level,” he told reporters. “It’s not something the states can remove. The budget is one of those issues. I think that will give more certainty to businesses as to what to expect.”
Georgia’s economy will continue to recover from the Great Recession and will see modest growth next year. That’s according to the forecast released by the Terry College of Business. But low government spending and fewer new businesses will still depress the economy.
Forecasters say the state’s economy will grow three percent in 2014. By comparison, it grew about 2.3 percent this year. Unemployment will average 8 percent next year, down from 8.5 percent now.
That’s due partly to major manufacturing announcements last year from companies such as Caterpillar.
Charles Knapp is an economist and president emeritus of UGA. Delivering the forecast to business leaders and others, he said the current approach to education will preclude more robust economic growth.
“We have a system of education in America that was built around an agrarian economy in the early 20th century. As a nation and particularly as a state, we have to summon the will to change it,” he said. Ultimately, in a flat world, a failure to educate our children lowers Georgia’s standard of income. That’s definitely showing up in the incoming data.”
Knapp said specifically, income levels in Georgia peaked in the mid 1990’s, compared with the nation, and have been falling since.
Knapp said changes to Georgia's tax code that lift levies on energy used in manufacturing are resulting in a job boost. Atlanta, Savannah and Athens will lead the state in job creation. Georgia, however, will still grow at a slower pace than the nation.
The nation’s economy won’t be roaring again like the go-go 1990s. That’s according to John Silvia, an economist with Wells Fargo, who also spoke at the event. He said the country is recovering and the growth will approach levels seen in previous years but won’t match them.
“Everyone asks, are we in a boom or a recession?” he told the crowd.
But he said the answer is neither. The housing market is picking up, for example. But more sustainable multi-family units are being built this time around.