The bad news: home values — which have yet to show they have hit bottom — will continue to struggle and that will probably lead to more layoffs in local governments whose revenue depends on property tax collections.
In his quarterly economic forecast Wednesday, Rajeev Dhawan, head of the Economic Forecasting Center at Georgia State University, predicted Atlanta will add 37,600 jobs this year and 47,300 in 2013. That’s a switch from 2011 when the area was losing employment. It’s also an increase from Dhawan’s prior forecasts.
But the job growth and housing demand it could spark will not be enough to lift home prices out of the doldrums this year, he said, adding that may take another year or more.
Georgia has been one of the states hardest hit by the recession and the anemic economic recovery that has followed. Metro Atlanta especially has been slow to recover because many of its biggest industries — construction and financial services — have struggled to regain their footing.
Georgia’s unemployment rate fell to 8.9 percent earlier this month while metro Atlanta’s unemployment numbers dropped to 8.7 percent in April — the lowest numbers in three years but still above the national figure.
Economist Jeff Humphreys, director of the Selig Center for Economic Growth at the University of Georgia, forecasts 1 percent employment growth for the state and metro Atlanta in 2012 and 2013.
He said the private sector, which has shed jobs in technology, construction and financial activities during the downturn, will complete restructuring by year’s end and be in better shape to hire in 2013.
But Humphreys thinks there is a 30 percent chance the nation could fall into another recession next year, especially if Europe continues to teeter financially, oil prices rise and the federal government doesn’t address spending. That could derail Georgia’s recovery and reverse the progress of 2012, Humphreys said.
Dorsey Farr, an economist with Buckhead-based French Wolf & Farr, noted two more issues that relate to both the broader economy and personal finances: household debt and changed attitudes toward home ownership.
Americans’ ability to continue shedding household debt could play a key role in the recovery, he said, adding, “We’ve got several more years of balance sheet adjustments.”
To read the entire story by Leon Stafford and Katie Leslie, go to AJC