By Valerie Baldowski
Business professionals from Henry received more bleak news at the Economic Forecast 2009 Breakfast, Dec. 4 at Eagles Landing Country Club.
The event was sponsored by Bank of North Georgia, and the speaker was Dr. Albert Niemi, Jr., Dean of the Edwin L. Cox School of Business at Southern Methodist University.
Niemi was straightforward in his assessment of the state of the economy. He predicted no recovery in commercial real estate until 2016; until then, sales are expected to be flat.
He told those in attendance job growth stopped in December 2007, and the economy has continued to worsen through the middle of this year. "We didn't go into a recession until July of 2008."
According to the Associated Press (AP), employers eliminated 533,000 jobs last month, the most in 34 years. The result of that is a 6.7 percent unemployment rate; reflecting the fact that the country is in a deepening recession. The high unemployment rate is an increase from 6.5 percent in October, marking a 15-year high.
Niemi predicted that the sluggish national economy will continue until possibly the third quarter of 2009, although it may be as long as 18 months before any real progress is seen. "I think that's a little optimistic," he said.
He gave an overview of Georgia's economy, explaining that the state's previous positive economic growth had lulled many businesses into a false sense of security. "I think that maybe we got a little comfortable that we're recession-proof," he said.
Niemi expects "more volatility in the marketplace," but expects Georgia to begin its economic recovery sooner than some other states. "Think about the possibility of a regional recovery. It's going to happen sooner here."
States with strong population growth figures are in a better economic position than those with lower-than-average statistics, he said. "Georgia's going to do just great. This is a good place to be."
To illustrate that point, Niemi referred to maps showing that Georgia's population growth was more than 50 percent above the national rate in 2005-2007. A second chart showing projected population growth from 2010-2030, had Georgia in the same percentile.
One of the attendees, Henry County Chamber of Commerce President Kay Pippin, acknowledged that his message came as no surprise to many in the business community.
"Not so much discouraging as confirming what we already knew," said Pippin
But despite what Niemi said, she said Henry will be ready to spring back when economic conditions improve.
"As one of the fastest-growing counties in one of America's fastest-growing states, Henry County is perfectly postured for a strong recovery when this recession is over," she added.
Pippin said she believes that Niemi's prediction for commercial real estate does not apply on a local level. "When he spoke of real estate being overbuilt and that market not returning until 2016, he was referring to the national picture. Henry County is projected to have tremendous growth from now through 2030, and that growth will demand new housing starts and commercial growth.
"Remember, 'Retail follows rooftops.' As our population grows, we will see more retail, more restaurants, more hotels, more medical offices, and so on, come to Henry County. Sure, it's going to get worse before it gets better, but it is going to get better, and when it does, the best place to be will be Henry County."