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since 12/15/98 |
| Columns::January 13, 2003 $1 million gift will establish endowed chair in public policy $6.7 million NSF grant funds study of land-use change in southern Applachian Mountains Adam Cureton is UGA’s newest Rhodes Scholar Woodruff, Honors Program student, named one of 40 Marshall Scholars Marine talk IRP considers changes in operational procedures Full of beans Campus Closeup Update: Private Giving Newsmakers A personal philosophy of teaching Campus News State, nation econmic forecast: Still raining About 1,100 Atlanta executives and UGA alumni attended the Georgia Economic Outlook luncheon in Atlanta last month. The
The Georgia forecast was called “shallow, modest and uneasy” by Dean P. George Benson. “Georgia has been savaged by this business cycle,” he said. • State Employment--Georgia’s nonagricultural employment will increase by 1.5 percent in 2003, which is a turnaround from the 2.2 percent drop in employment experienced this past year. But even though the state will add 54,000 jobs in 2003, total employment will still be 25,000 jobs shy of where it stood in 2000. “We don’t believe Georgia’s labor market will fully recoup the jobs lost in the recession until sometime in 2004,” Benson said. “Only then can we truly say that Georgia’s economy has recovered.” Georgia’s employment gain in 2003 will be slightly ahead of the 0.8 percent increase predicted for the nation. • Manufacturing--After three consecutive years of unrelenting layoffs and plant closings, Georgia’s manufacturers will begin hiring again in 2003. Manufacturing employment will rise by 1 percent, or 5,300 jobs, next year. The increase is meager when measured against the backdrop of 63,900 Georgia manufacturing jobs lost since 2000. • Income--Personal incomes in Georgia will grow an average of 2.5 percent in 2003, after adjusting for inflation. The increase follows income gains of 0.9 percent in 2002, 1.7 percent in 2001 and 5.9 percent in 2000. • Biotechnology--The state’s economic development strategy to pursue biotech talent and research dollars has resulted in a substantial increase in the number of biotechnology firms in Georgia. This year, the Selig Center identified 120 biotech companies operating in Georgia, up from 76 companies just two years ago. Out of the 120 firms, 42 of them reported sales of at least $1 million or had at least 20 employees. The Selig Center estimated that total employment among Georgia’s biotech companies now exceeds 16,000, and the industry has reached a critical mass in Georgia that will allow it to attract adequate venture capital funding and other investment. • Long-Range Outlook--“Until the 2001 recession began, we had become accustomed to economic growth in Georgia that was much stronger than that experienced by most other states,” Benson said. “Georgia has been near the top in many economic categories. Going forward, we will likely drift toward the middle of the pack.” • National Gross Domestic Product--The sum of all goods and services produced within the United States surged by 5 percent in the first quarter of 2002, plummeted to 1.3 percent in the second quarter, rose again by 4 percent in the third quarter, and appears to have slumped back to 1 percent in the last quarter. On an annual basis, the Selig Center predicted economic growth, as measured by GDP, will increase 2.5 percent this year and expand to 2.8 percent in 2003. • National Employment--In 2003, total nonfarm employment in the U.S. will increase by 0.8 percent, or about 1.1 million jobs. Employment showed a net gain in the second half of 2002, but the increase in job growth was very slight. The U.S. unemployment rate will gradually rise during 2003 from 6 percent to 6.4 percent. For the time being, companies are tending to work their current employees a little harder (one factor behind recent productivity gains) and to hire temporary workers who can be released on short notice. The lack of venture capital, which fuels job creation, also is restraining employment growth. • Corporate Profits--The U.S. economy experienced a very deep profits recession that began in 2000, deepened in 2001 and persisted through 2002. But corporate profits gave the appearance of staging a recovery in the final quarter of 2002 and should be sustained through 2003. However, the slow return of profits and unusually high degree of uncertainty about the outlook for business will force companies to continue scrutinizing spending. And excess capacity in many industries will make it difficult for many companies to raise prices. • Interest Rate--The Federal Reserve’s current monetary policy will continue through most of 2003. The federal funds rate is 1.25 percent--essentially a zero rate after adjusting for inflation--and the Selig Center forecast anticipates no increase before the third quarter of 2003. “We are witnessing a once-in-a-generation opportunity to acquire capital funds at bargain basement prices,” Benson said. • Inflation--Many of the factors that have held consumer price inflation to the lowest levels in more than 30 years still exist. Inflation bottomed out in 2002 when the consumer price index rose only 1.5 percent. Assuming oil prices behave as expected, inflation will increase by 2.4 percent next year, according to the Selig Center. Energy and medical prices will push price inflation, counterbalanced by price weakness in computers, clothing and telecommunications. |
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