Forecast For Coastal Georgia Region Looks Bright

Despite expectations of a slowdown for the state’s economy during the next couple of years, employers in the Brunswick, Ga., area should continue to hire people at a strong pace, an economist predicted Wednesday.

“In 2006, the Georgia metro areas with the strongest growth will be Warner Robins, Brunswick and Savannah, which will outpace the state’s (rate of job) growth,” Rajeev Dhawan, director of the Georgia State University Economic Forecasting Center, stated in his quarterly update.

Thanks to modest, but sustainable increases in Georgia mortgage demand, the Brunswick area will have expanded its population and, in turn, workforce, by 3.3 percent in 2006, compared with the statewide growth rate of 2.1 percent. Next year, the Brunswick area should jump another 2.7 percent.

The area’s shipping business is expected to benefit from cargo diverted from New Orleans as well an ongoing channel-deepening project. The port activity and military base realignments are other reasons for the bright outlook in coastal parts of the state.

“These are what you call the sexy news coming out,” he said.

The less promising news is that some of the sectors that have bolstered the state’s recent economic growth - particularly residential home construction - are expected to start cooling down. The state’s economy will show signs of slowing down during the next couple of years as home loan rates creep steadily upward.

“We can’t fight the big picture anymore,” Dhawan said.

Higher short-term interest rates have made qualifying for a Georgia home loan more difficult, leading to a slowdown in housing construction. The surge in oil and other energy prices also has taken a bite out of consumers’ spending.

While employers added 92,200 new jobs during 2005, Dhawan said he predicts the state will finish this year with 82,200 more hires before another dip next year. During 2007, Georgia might add only 61,100 new workers - an indication that the economy is still plugging along, albeit at a slower pace.

The housing slump also has become evident down along the Southeast Georgia coast but not enough to dampen growth, said Vernon Martin, executive director for the Coastal Georgia Regional Development Center, which includes Chatham County and its surrounding area.

“If there’s any region that will continue to have some growth, even if it might be moderate, this would be one of the primary ones because of the kinds of retirees that are moving from the Northeast here and in some cases - provided they can sell their property - moving up from Florida,” he said.

Dhawan said he also expects the national GDP to drop next year before recovering in 2008.

His predictions are based on the theory that the Federal Reserve, having achieved the goal of moderating the home building market and potential inflation worries, will decide to cut interest rates early next year. Until this summer, the Fed had been steadily hiking mortgage rates for the past two years.