Columns:: Better days ahead: Economic recovery ‘will finally be complete’ in 2004

since 12/15/98

Columns::December 8, 2003

U.S. Congressman will deliver Holmes-Hunter Lecture
Joseph Wolpin, 2003 graduate, becomes university’s second Marshall Scholar in two years
Two UGA faculty will speak at fall Commencement ceremonies
Hugh Kenner, expert on Ezra Pound and James Joyce, dies at age 80
Retirees
Taking a test spin
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Better days ahead
Economic recovery ‘will finally be complete’ in 2004

By Jim Kvicala
jimkvicala@terry.uga.edu

Dean George Benson delivered the economic forecast at the 21st annual Georgia Economic Outlook luncheon Dec. 4 in Atlanta.

After two years of lackluster growth, Georgia’s economy will strengthen substantially in 2004, according to the annual economic forecast released last week by the Terry College of Business.
“Sub-par growth will be replaced by growth that is typical for this stage of the business cycle,” said Dean P. George Benson. “Even better, Georgia’s job machine is finally in forward gear and will be picking up speed. Total employment will rise by more than 60,000 jobs in 2004. That’s almost three times more than the 22,000 jobs that will be added this year. At some point in the coming year, the number of jobs in Georgia will be greater than pre-recession levels, and Georgia’s economic recovery will finally be complete.”
Benson delivered his forecast to the more than 1,000 business executives, government leaders and alumni at the college’s 21st annual Georgia Economic Outlook luncheon held Dec. 4 at the Georgia World Congress Center in Atlanta.
One of the alumni in attendance was Gov. Sonny Perdue, whose opening remarks echoed the overall optimism of the Terry College forecast while reminding the audience that state revenues will lag behind the recovery, forcing the state to continue to focus spending on identified priorities. Perdue said he expects Georgia to lead the rest of the South into recovery and will do what he can to encourage economic growth.
Nariman Behravesh, chief economist for the economic forecasting firm Global Insight, delivered the national economic outlook. “All evidence points to a strong U.S. economic rebound being already under way,” he said. “The United States should lift the rest of the world, but the strength and sustainability of the world recovery will remain questionable for some time.”

The Georgia forecast, produced by Selig Center director Jeffrey Humphreys, made the following predictions:
• Gross state product: In 2004, the GSP--the inflation-adjusted sum of goods and services in Georgia--will increase by 4.2 percent, which is higher than the 3.5 percent increase in economic growth the Selig Center is forecasting for the United States as a whole.

• Employment: The state’s nonfarm employment will increase by 1.5 percent, greatly exceeding the 0.6 percent increase expected for 2003. Georgia’s employment gain should also be larger than the 1.0 percent increase expected for the nation.

• State revenues: State revenues are projected to rise at an annual rate between 6 and 7 percent through the remainder of this fiscal year and into the next. While balancing the state’s budget will still be a challenge, that growth may help the state avoid the full 5 percent budget cut planned for fiscal year 2005.

• Manufacturing: Excess capacity is shrinking, and markets for many manufactured products are starting to improve and should continue to improve through 2004. The Selig Center sees exporters on the verge of a strong recovery, due to a weaker U.S. dollar and accelerating growth in Japan and Europe. The continued migration of transportation equipment manufacturers and parts suppliers to Georgia will help offset jobs lost elsewhere in manufacturing.

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