Georgia Is Well Positioned to Weather the Coming Economic Storm

Walt Farrell

Published August 16, 2022

From the CEO

By Chris Clark, President & CEO, Georgia Chamber of Commerce

War in Ukraine. COVID-19 variant BA.5. Rising interest rates. High fuel costs. Soaring food prices. West coast supply chain failures. Chinese economic and banking crisis. Taiwan. Political races across the country. A disconnect between Washington policies and small businesses.

Exceptional level droughts around the world. Labor shortages. High home prices coupled with a lack of workforce housing. It’s enough to keep anyone awake at night. All these issues, and a dozen others, are leading most economists to declare some level of economic recession in the next 18 months.

Further evidence that Washington policies do not support true economic mobility and growth? An analysis by the National Association of Manufacturers notes that the new Schumer-Manchin tax, in 2023 alone, will reduce real GDP by $68.5 billion and cut American incomes by $17.1 billion.

It’s no wonder that U.S. gross domestic product projections have been slashed by most organizations. It is likely, according to most economists, that America will follow the world into a significant economic downturn, but here in Georgia things look much brighter.

According to Merchant Maverick research, Georgia ranks in the top 15 states that will minimize the economic impact of the recession. More good news comes from the U.S. Department of Commerce‘s Bureau of Economic Analysis. Their first quarter state by state GDP figures shows that Georgia had the 6th best performing economy in the country, outpacing every other southern state including Florida and Texas. Georgia is also in the Top 10 states for strong rainy-day funds in state budgets.

The Peach State’s outlook is rosier than most of the country because of key decisions made over the last decade. First, we grew our economy and diversified our industry mix after the great recession of 2007. Over the last four years, Governor Kemp has reduced regulations and boosted the state’s reserves while keeping the state open during COVID-19. This allowed companies to continue to operate and grow and sent a message that our state was a safe place for corporate investments. The Georgia Department of Economic Development has recorded 4 years of record growth announcing over 119,963 new jobs, $42.9 billion in new investment from over 1,281 projects, and a record 412 entertainment productions filmed in the state. 77% of those are in rural communities, further strengthening economic opportunities no matter where you live, and firmly cements Georgia as the innovative leader for the next generation of e-mobility. Equally important to our recovery and standing is a pro-job, pro-community focused General Assembly led by Speaker David Ralston and Lieutenant Governor Geoff Duncan. In the last few years, they’ve passed legislation addressing labor shortages, public safety, infrastructure, healthcare, and rural broadband by taking a responsible and accountable approach to government.

Georgia’s coordinated state business network is also critical to record growth. Together the Georgia Chamber and local chambers work hand in hand with community and state leaders from both sides of the aisle alongside a Governor devoted to a safer and healthier state and economy.

Maintaining our economic edge through turbulent times requires that we actively build on this effective and efficient foundation. Earlier this year we released a report focused on growing a New Georgia Economy. Research shows clearly that we must continue to concentrate policy and strategy on three critical areas:

  1. Georgia has a strong history of investing in infrastructure and that must be maintained. The infrastructure of the future requires a dynamic energy grid, a completed Plant Vogtle, a diversified portfolio, and e-mobility charging. We must also invest in our supply chains by building out rail, air, port, and road infrastructure. It is projected that the demand for third party logistics services will double in the next 5 years to $408 billion, underscoring the significant growth our state is experiencing. Georgia must also focus on cyber security, healthcare outcomes, and telecommunications to ensure that every community and every business has access to global markets.
  2. We must also keep building an innovative, inclusive, and dynamic economy that we started back in 2008. We do this by increasing minority small business success, helping more Georgians start their own businesses, and attracting more research and development and technology investment. Our state’s research universities generate more than $2 billion a year in public and private research and development funding proving our state is poised for even greater innovation and growth. Our local and state elected leaders must also continue to offer innovative policies and a competitive tax and incentive business climate that levels the playing field with other states.
  3. Finally, we must win the ongoing war for talent and address both short and long-term labor shortages. Though a downturn would see unemployment rise; projections show that it will be a short-term challenge. Long term, Georgia communities must improve workforce housing stocks and career pathway alignment. We need more on-the-job training. Educators must address unfinished learning issues rising from lost classroom time during COVID-19 and we must reform our legal immigration system nationally to address critical industry shortages. By 2025, Georgians must fill 30,000 manufacturing jobs, 122,000 healthcare positions, 40,000 educators, and 13,000 skilled professional openings. By 2030, we’ll need 42% more energy workers, 31% more data specialists, and 33% more cyber security professionals. By working closely with University System of Georgia Chancellor Perdue, Technical College Commissioner Dozier, and state school Superintendent Woods to rethinking workforce development and quality education, we will be able to keep our economy growing and help Georgians remain financially secure.

The good news is that Georgia business, education, and elected leaders are working on all of these. We’re building on an incredible foundation, and we believe that the Peach State will continue our strong economic performance even as the rest of the world struggles.