Yes, much like Georgia Tech graduates taking over the International Space Station, the end is nigh from an economic standpoint as well for Georgia, at least according to Dr. Rajeev Dhawan, director of the Economic Forecasting Center at the Robinson College of Business of Georgia State University (thankfully, not Georgia Tech).
In the Forecast of Georgia and Atlanta (November 2008) report published Nov. 19, Dhawan said Georgia’s economic picture has gone from bad to worse recently, as job losses mount, bankruptcy rates increase and home prices continue to depreciate. According to Dhawan, the prognosis for the coming year is just as bleak as weak corporate spending brings with it a flood of layoffs looming on the horizon before giving way to a tepid recovery in 2010.
Dhawan said the intensity of the job losses over the last few months has been more severe than expected.
“Since our forecast in August, job growth has been substantially downgraded,” he said. “So far this year, we have lost almost 41,100 jobs and job losses are expected to continue at this heavy rate for the next quarter as we lose another 34,000 jobs.”
The situation is so bad that meetings at the highest levels of Georgia government have been convened to discuss the situation. Of course, our cameras were there.
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Why Mr. Rogue…at those rates soon there will be no jobs left in GA!!!!
Ah, but wait..Lord Obama will rescue us! His strategic southern plan will include vouchers that may be signed so that we might receive kool aid (lemonade optional) & open stands by the thousands-thus revitalizing the GA ecomony & changing the world.
Ahhhhh for those halcyon days when the talk radio experts told us a recession was just a fever dream of the liberal media
this new guy sounds like the old ga st doom and gloomer. has there ever been a positive, upbeat economic forecast by a georgia economist?
It IS the dismal science, 3J.
true, true.
Not everyone is convinced:
Norton: Rough spots but no Northeast Georgia recession
http://www.accessnorthga.com/detail.php?n=205925
“Norton summed up his 2008 Native Intelligence report by saying that the economic picture is not as bad as the national media paints it.”
“Hold it! Now, are we actually gonna go before a federal judge, and tell him that some moldy Babylonian God is going to drop in on Central Park West, and start tearing up the city?”
jsm: That link you posted with Frank Norton’s “outlook” made me laugh…that guys been wrong so many times lately, that I can’t take that seriously. His optimistic outlook gets in the way of accuracy, I believe.
I can’t tell where that guy’s waist is.
DD, I don’t know Frank, but he seems to make news up here anytime he makes predictions. I’m very interested to see if the housing market up here returns before it does in Atlanta. I’m hearing that outlying counties like Habersham and areas north have not seen home prices drop severely, since there aren’t many houses sitting idle. I’ve also heard some pretty abysmal forecasts for Forsyth County based on its current inventory of developed lots.
BTW, that is a great quote from one of the greatest movies of all time.
1.) Jobs = Economic Growth
2.) Economic Growth = Commercial Deals New Housing Consumer Spending
Without #1, the Atlanta market is looking at negative absorption numbers rivalling those dark days after 9/11. (Absorption roughly defined is how much available space is absorbed by new busines [READ:JOBS} in an area over time)
My friends well out of Atlanta that grow crops or breed animals, ought to be mightily concerned that the ‘little engine that could’ AKA Atlanta, is posting troubling absorbtion numbers. This will ultimately affects the whole State in terms of revenues.
I am hearing from the ‘money crowd’ we may not see the bottom until 4Q09. That’s when we will know if the foreclosures are staunched.
This economic downtown is hugely different from previous downturns for a variety of boring technical reasons. Point is, this is the first shock. Deeper shocks, such as challenges to US ‘full faith and credit’ of our obligations will surely follow as the impact of debt service becomes unsustainable.
The time honored tradition of petty politics is long past, and those who humor themselves with “We lost, they won” mentailites are counter-productive to the solutions this Country must have to thrive.
China is signing deals with Cuba, Al-Qaida is calling our President a ‘house negroe’. Biden said we’d be tested in 6 mos, heck it ain’t even six days!
Frank Norton does make news…he’s got a lot of history in the area, I just think, at times, he lets a little “hope” interfere with reality.
That said, I hope he’s right. Hall Co. may be in a better position than Forsyth / Cherokee, as Hall is larger county (in size) with population that has increased over time, not during a 10 year boom (like Forsyth & Cherokee).
As for Forsyth Co…yeah, from real estate agents I know, as well as a couple of soil scientists (who also are a decent judge, b/c they do the soil samples for all these developments before the subdivision gets approval), there might be up to a 3 year market supply of unsold homes & undeveloped lots (mostly lots) .
Land values have especially starting coming down in the areas…from inflated prices of $50K-$60K per acre in some places, to more realistic $20K prices.
Places like Habersham, Banks, Franklin, Union, Towns, etc… I could see those markets being fine, b/c retirees are still going to move away from Atlanta and those places haven’t been “over-developed” prior to the housing bubble bursting. I guess the only problem is whether they have any money left in their IRA to buy the thing?!
The problem with Hall, especially Gainesville, is the Mexican population. Schools are over crowded in the city so no one will move in. Everyone is headed to North Hall.
I’m not sure I’d believe Norton any more than I’d believe any other realtor. They always say times are good even now when nothing is selling in the city. (after all no one will use a realtor who says the’re business is dead)
As far as business goes, ours is dead. A lot of small businesses are. Congress is concerned with the car companies while small businesses are going under everywhere. If small business make up 70% of employment, shouldn’t congress be concerned about them?
Better yet, congress should get out of the way. It is their fault we are in this situation.
Sorry, umust, you need to find some Commercial RE pro’s in the future…not everyone is a hack in any biz…
My plea for legislators to put their collective Party polemics on hold and come together for truly innovative solutions. This is the only reason I post here, in some small way to plant a seed to resolve the gridlock of Partisan polly tix….
This Commercial REALTOR will say that ALL commercial markets are way off, and most of my contemporaries have agreed for over a year. About to get worse, I fear.
The smartest firms started cutting back over a year ago, knowing that after the election hoopla (READ:Stimulus Package, etc.) 2009 would be a poor performance year. Some say a 5500 Dow, others look at the 7300 ‘magic number’ as bottom. Truth is, nobody knows how low the bottom is.
The housing market and energy costs drive everything, and until foreclosures are stabilized or return to a ‘normal’ level, housing starts are dead. OPEC stated their need for $70-90 barrel prices to make their pro rata numbers work and will continue to decrease production until they get it. Hence 4Q09 is a ‘comfy’ guess as to a return up the Bull Market. Markets hate uncertainty .
On a macro economic scale, watch out for the idea of pegging US Treasuries (Back to Carter days) to the yen. China will not continue to buy US Treasuries at the rate they are now. A yen based US Treasury may assauge Asian concerns.
There is NO way to pay off the National Debt. Period. How do you make it go away? Inflation and devaluation.
Smart buys in a bear market: Inverse ETFs. Up 20-40%!
WE will get through this, but this Recession will be more like the Depression as most younger folks have never experienced a truly Bear market.
God bless the Nation, we have so many resources Human and Natural.
Tea – I didn’t call any one a hack. I happen to know a lot of good realtors and have commercial property listed with one in Lawrenceville. My point is no one likes to say business is bad or that they are not selling anything. If you had to choose between a realtor who says they are doing great and one who says business is slow, you’d pick the one that says they are doing well. After all they must have potential buyers. Which is what Norton is doing. He needs business.
Good luck to you. I really hope the realestate business turns back around.
Thanks umust, biz is GREAT! (;>)
“Congress is concerned with the car companies while small businesses are going under everywhere. If small business make up 70% of employment, shouldn’t congress be concerned about them?”
I heard a statistic last night that 1 in 7 jobs in America are tied to the automotive industry. I was really surprised at that. Having worked for a tier 3 supplier in the past, I know many of these jobs are with suppliers in multiple tiers, but really, is our economy that dependent on automakers? I believe in small business, and I wonder how much of it is tied to the automotive industry. I also wonder what the true effect will be on this economy if the Big 3 go through Chapter 11 like Delta did and force some greater efficiency in an effort to return to competitiveness. The UAW is the antithesis of the small business model, and their influence has got to be cut for Detroit to survive. If not, Japan, Germany, and Korea will own the auto industry that we created.
jsm,
It depends on how they count “tied to”. The big three automakers account for about 300 billion in sales a year. All of their last tier suppliers cannot be larger than this amount, since all purchases must be funded by this revenue. The suppliers to these suppliers are then also limited by an even smaller fraction of this on down to whoever is making the raw materials. Many of these parts are supplied from overseas, so it is really not fare to count them as part of our economy.
On top of that there is gasoline, which is tied to the auto industry. We use about 10 million barrels of oil on cars, so at least 300 Billion more could be called “auto industry related”. But this would be fraudulent to include since it would be used whether or not cars are purchased from GM or Ford.
Then there are car parts for repair and maintenance. I am not sure of this figure, but it is probably in the tens of billions. Again, this would be unaffected, since if you buy a Toyota instead of a Ford, you would still need Toyota parts and mechanic here in the USA.
The GDP is about 13 Trillion, if I remember correctly. But, this is only the value of final goods, not intermediate goods which were mentioned when discussing the big three auto makers. So, how many total dollars in sales revenue does every country in the US earn? I do not even know what that metric is called, but it must be greater than GDP.
So, in total, only that 300 Billion directly counts, and perhaps double that to 600 Billion for the tiers of suppliers that actually reside here in the USA. The total effect of the extremely unlikely scenario of a big three chapter 7 is 1/20 or 5 %.
Of course, this is back-of-the-envelop and course at best. However, I would not begin to trust the big three automakers and their claims of pending disaster as they have their hands out to Congress.
JMS
We own an auto repair shop and I bet it is tied to those numbers too, even though we work on foreign and domestic cars. Our biggest problem is people won’t spend the money to fix their cars.
When money is tight people give up car washes, starbucks, nail salons, oil changes, maids and eating out. Anything they don’t have to spend money on.
Then if they are in a wreck, they cash the insurance check instead of fixing their car because they need the money. That puts collision centers in a pinch, many are laying people off.
When collision centers aren’t buying parts that does effect the auto industry so maybe that would be a link. I will say insurance companies try to buy all after-market parts so that has hurt the auto industry too.
Now I’m rambling so I’ll stop.
The auto makers need to file chapter 11 and do something about the unions.
umbk,
You are right about chapter 11. It is sad that it is even needed, but the unions will not willing admit they made a mistake and squeezed the automakers a little too hard over the years.
Of course, if I was in charge, I would give my employees good wages, good working conditions, reward the productive, fire the incompetent, train the unskilled and close each plant the very second they unionized.
If more big manufacturing firms did that, they probably would not have created the monsters they created.
Doug
The union monsters were created long ago at a time they were needed. That is no longer the case. People should get jobs and raises based on their on work, not on what a union boss has negotiated.
I am sure the auto makers would still give their employees good wages. The foreign, non-union, automakers do.
This goes for the teachers unions too. It is crazy to have to pay someone for the rest of their life. No wonder the auto makers and the government is broke. I don’t get paid for life, do you?
umust,
I agree completely. Unions played a crucial role in employee rights, but like most things succumbed to mission creep and greed.
This is kind of out of the current stream of discussion…but, going back to the comment earlier about the hispanic population being so great in Gainesville. You’re absolutely right…North Hall has become the place of “exodus” for many residents that lived in Gainesville/South Hall.
However, curbing illegal immigration is one thing that is actually aided by the recession that we are in. I can name off 3 or 4 locations in the Hall / Forsyth / Dawson areas that were prime hangouts for Hispanic “day laborers” each morning…now, with construction in the thank…none, zero. Many are moving out of the area, b/c there’s simply no work to do, thus no way to pay rent on their houses/apartments.
As for Real Estate agents, closing Attorneys, lenders, etc….if ANY of them tell you there business is good or even normal right now, I’m willing to bet my house that they’re lying to you (now, Foreclosure / Bankruptcy Attorneys are doing real well… I imagine that Criminal attorneys are doing pretty good too – although, they might be having a difficult time getting paid!)
That would be “construction in the tank,” not “in the thank”…Got a little ahead of myself with Turkey Day coming up soon!
DD,
The two real estate agents that I know both always told anyone who asked that things are going well, but when I inquired about properties that have closed, they couldn’t name any. A builder friend of mine has not sold a house in almost a year (the last one he sold to me), but he is a little more honest and says he isn’t doing too well.
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