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Georgia shows signs of slow economic recovery

FILE - In a April 12, 2004 file photo, Marc Friday, general manager of the Planters Inn, poses at the entrance of the hotel in Savannah, Ga. Friday has made several recent new hires _ two desk clerks, two housekeepers and an extra breakfast attendant. Savannah has fared better than most Georgia cities during the recession, thanks to having the nation's fourth-busiest container port and a hefty population of military personnel from Hunter Army Airfield and the Coast Guard. Now the coastal city's other big industry, tourism, is roaring back after a profitable 2010.  (AP Photo/Stephen Morton, File)

FILE - In a April 12, 2004 file photo, Marc Friday, general manager of the Planters Inn, poses at the entrance of the hotel in Savannah, Ga. Friday has made several recent new hires _ two desk clerks, two housekeepers and an extra breakfast attendant. Savannah has fared better than most Georgia cities during the recession, thanks to having the nation's fourth-busiest container port and a hefty population of military personnel from Hunter Army Airfield and the Coast Guard. Now the coastal city's other big industry, tourism, is roaring back after a profitable 2010. (AP Photo/Stephen Morton, File)

The Associated Press

SAVANNAH, Ga.-- Hotels are hiring new desk clerks and housekeepers in anticipation of a spring tourist boom in Savannah, while even a rural Georgia city devastated by manufacturing losses is putting some people back to work as construction begins on a new $57 million private prison.

Yes, Georgia still lags behind most of the U.S. with a 10.4 percent unemployment rate and barely a trickle of new hiring to make up for 350,000 jobs lost since 2007. But economists said they see the state's economy slowly pulling itself from the grip of recession and predict more progress will be evident by the year's end.

"The overall trend, if you look, clearly shows an economy that is recovering," said Jeffrey Humphreys, economic forecaster at the University of Georgia. "By the end of the year, I think Georgia will be performing on par with the rest of the nation."

What looks promising? Last week the state Department of Revenue reported that February tax collections rose 26 percent compared with the same month a year ago. Sales taxes were up, a sign that Georgians are spending more. Corporate income taxes also increased, signaling that businesses are making more money. And it was the eighth straight month that state revenues increased, signaling the good news is not likely a fluke.

Even more encouraging are new jobs being created in places like Jenkins County, a rural county between Augusta and Savannah that's among those hardest hit in Georgia by the recession. Since 2006, Jenkins County lost three manufacturing plants that made windows, mobile homes and underwear. The plant closings cost the county about 1,500 jobs, and its unemployment rate remains at 19.7 percent, the second-highest in Georgia.

But now King Rocker, the mayor of tiny Millen, is seeing sales perk up for the first time in three years at his building supplies store in Jenkins County. Business had withered by about 65 percent, he said, until Corrections Corporation of American broke ground around Thanksgiving on a prison designed to hold 1,150 inmates -- the company's sixth private prison in Georgia.

"We're getting a lot of sales out of the prison," Rocker said. "They're in here all the time getting two-by-fours and plywood, pipe fittings and electrical supplies. Right now they've probably got 150 people out on the job site, and that's brought people into the town and they're buying lunches and gas."

The prison's owner estimates it will employ about 200 workers full-time, many of them local hires. The company will also have to pay taxes on the prison's 107 acres in Jenkins County, and its electric and water bills are expected to bring in substantial cash.

Jenkins County had Georgia's worst unemployment rate early in the recession, and in January it still ranked second-highest with a rate of 19.2 percent. Paula Herrington, director of the local Chamber of Commerce, said it could be another decade before the county's economy recovers completely.

"It's doom and gloom, but it's going to turn around," Herrington said. "It's just going to take a while because we were so down."

Savannah has fared better than most Georgia cities during the recession, thanks to having the nation's fourth-busiest container port and a hefty population of military personnel from Hunter Army Airfield and the U.S. Coast Guard. Now the coastal city's other big industry -- tourism -- is roaring back after a profitable 2010.

Savannah raked in $11.6 million in hotel taxes last year, topping the coastal city's previous best year ever in 2007, said Joe Marinelli, president of the Savannah Convention and Visitors Bureau. Hotel operators say they're gearing up for a busy spring tourist season based on what they saw in 2010.

At the Planters Inn in downtown Savannah, general manager Marc Friday has made several new hires -- two desk clerks, two housekeepers and an extra breakfast attendant. That's a big addition considering his 60-room inn has only 32 employees.

"We're expecting big things," Friday said. "More people are making their reservations and all the indications are that it'll be a great year. And last year was phenomenal."

Still, Georgia's economy remains a long way from a full recovery. January marked the 40th consecutive month the state's unemployment rate has exceeded the national average, which was 9 percent.

Georgia Labor Commissioner Mark Butler said it's not surprising for unemployment to lag behind other signs of economic turnaround. That's because businesses often start ramping up production by having employees work overtime. They don't start hiring new workers until they absolutely have to.

"We still are seeing a lot of caution on the part of employers to expand their workforce," Butler said.

Also, unemployment can jump as the economy starts to improve because laid-off workers who had stopped looking for new jobs start searching again, said Kenneth Heaghney, Georgia's state fiscal economist. Unemployment rates count only the jobless who are actively seeking work.

Metro Atlanta is still struggling with 10.4 percent unemployment because of layoffs in construction, manufacturing, and administrative and support services.

Statewide, a few employers have shed large numbers of jobs or closed entirely since January, according to the state Labor Department. Augusta lost 242 jobs because of layoffs at Teleperformance USA, which provides customer service representatives for other companies. In southeast Georgia, Mohawk Industries closed its Dublin plant, the last textile manufacturer in Laurens County, costing 173 workers their jobs. Trucking company Greatwide Dedicated Transport said last month it would close its operation in Barrow County, which stands to lose 102 jobs.

It's not a bleak picture everywhere, though.

Columbus is getting a big economic boost from one of the nation's most recession-proof industries -- the military. The Army has begun relocating about 28,000 soldiers and civilians to Fort Benning to coincide with its decision to move its Armor School to Georgia from Fort Knox, Ky.

In rural areas that rely on agriculture, such as in southwest Georgia, farmers are doing better because high commodity prices are fetching growers more money for their crops, said UGA's Humphreys.

Elsewhere in the state, more than two dozen companies have announced plans to build or expand operations in recent months, according to the state Department of Economic Development.

Last month, FedEx Ground began construction of a distribution center in Norcross that will employ 240. Appliance maker Electrolux announced it will create 225 jobs in Augusta with a new customer support center by 2014. Great Dane Trailers, which closed its Savannah plant in 2009, said last summer it's building a manufacturing plant in Statesboro that will bring 400 jobs in the next four years.

"We were going to come out of the recession a little slower because of the industries we were in" such as banking and construction, said Economic Development Commissioner Chris Cummiskey. "I think we're at the end of that cycle. We have seen a tremendous amount of activity."