Jeffrey M. Humphries

Of the three leading Georgia economists speaking at the Business Growth Expo on Nov. 8, Jeffrey M. Humphries, the director of the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business, seemed the most pessimistic about the state’s economy.

“I think that there is a 40 percent risk of recession,” he said shortly into his comments citing the price of oil, the drop in housing permits and the drought that Georgia is experiencing. “I have never seen one like this. We have an agricultural recession and a housing recession; I think I’m getting the blues.”

Rajeev Dhawan, director of the Economic Forecasting Center at the J. Mack Robinson College of Business of Georgia State University, and Roger C. Tutterow, dean at Mercer University’s Eugene W. Stetson School of Business and Economics, were equally cognizant of the threats to the state’s economy, but more reserved in their forecasts.

Dr. Dhawan warned, however, that “cash is king” and said that individuals and businesses would have to depend on their own reserves because banks would not be making many loans.

Dr. Tutterow acknowledged that the financial sector was hurt by the housing problems, but added that the insurance companies were aware of pending risks and seemed to have evaluated the threats to the economy well.

All three economists said the underlying fundamentals for Georgia seemed positive in comparison to other parts of the country, even as other Southeastern states were more competitive and challenged each other aggressively for investment from throughout the United States as well as abroad.

Although several recent national rankings have placed Georgia as one of the better states in which to do business such as that of Site Selection magazine, Dr. Tutterow pointed out that the other states in the top ten listings also were mostly from the Southeast.

Georgia especially benefited, the economists said, from the strength of the global economy because of the business generated by Hartsfield-Jackson Atlanta International Airport and the Georgia Ports Authority. The costs of establishing businesses in the state also were positive even in the face of the water crisis and competition from surrounding states.

“The drought may have been a blessing in disguise,” Dr. Tutterow added, “because it brought the issue onto the political agenda.” Even so, he saw it as a major threat. Besides affecting the state’s agricultural sector adversely, he said the drought and the state’s water shortage could be a negative in the state’s image for attracting new business.

Despite his calculation of a 40 percent chance of recession, Dr. Humphries could quickly tick off the state’s assets: a rise in exports, more foreign direct investment, the strength of the state’s logistics and transportation business, the importance of the state’s military sector, advances in life science and the growing number of retirees choosing to settle in the state.

Dr. Dhawan complimented Delta Air Lines Inc. for its international strategy, especially for selecting flights to areas of the world that aren’t saturated with other carriers. “It’s not Singapore Airlines yet in terms of its service, but it’s getting better,” he added.

The annual Expo was organized by the Metro Atlanta Chamber of Commerce and the Atlanta Business Chronicle.