Economic forecasters on Tuesday predicted the good, the bad and the ugly: Georgia has weathered the worst of its job losses, but a worsening commercial real estate market will help keep the state's recovery lagging behind the nation's well into 2011.
Meanwhile, though increased domestic production could create more jobs in the spring, a glut of workers pounding the pavement means already historic unemployment levels could hit 11 percent before tapering off in mid 2010.
"Opportunities to take advantage of the economic recovery may be greater outside Georgia," according to Robert Sumichrast, head of the University of Georgia's business school, adding the grim news is still in line with improvement, albeit gradual.
"This upturn will be different. Our recovery will be slow and bumpy," he said.
Sumichrast spoke to Atlanta executives, government and business leaders at UGa.'s 27th annual economic outlook luncheon. It occurred against the backdrop of one of the most bleak economic periods in decades.
California-based RealtyTrac Inc. estimates that Georgia saw 9,664 foreclosure filings in November, among the highest rates in the nation.
The number of payroll jobs in October decreased 227,700 from October of 2008, with Sumichrast predicting as many as 370,000 jobs will vanish before the dust settles.
"Plus, Georgia's over dependence on development meant that the financial crisis did much more damage to Georgia's banks than to the nation's financial sector," said Sumichrast, who estimates job losses in financial firms were 30 percent deeper in Georgia than elsewhere in the country.
But Sumichrast said the state is indeed in a turnaround, with home values expected to correct themselves in upcoming months, and business spending set to increase sharply, especially for transportation equipment, computers and software.
The most important piece of the puzzle, however, lies in job creation, he said.
"Job creation, and the income growth that accompanies it, is absolutely vital to the outlook for both consumer spending and the economy," he said.
Sumichrast said rising domestic production will expand Georgia jobs in the spring, though not enough to keep pace with the number of people entering the market. He said jobs in the health care industry, temporary agencies and with the federal government should lead the way, with more financial jobs returning in late 2010.
The construction industry, meanwhile, will take even longer to recover than other sectors.
"Only in 2011 will Georgia's overall construction industry begin to make significant contributions to the state's economic growth," he said. "And until that happens, Georgia's economic recovery will continue to proceed more slowly than the nation's."
News for the nation wasn't much better. It could be 2013 before the labor market replaces the estimated 8.5 million jobs lost during this recession, according to David Wyss, chief economist at Standard & Poor's in New York. Wyss pointed to a silver lining: Rock bottom has come and gone.
"The slope is going to be upward from here," he told the luncheon audience Tuesday.