Rajeev Dhawan

Despite issuing a generally bleak economic forecast for Georgia, the Georgia State University economic report card issued Feb. 27 highlights the state’s export strength relative to the rest of the nation.

Rajeev Dhawan, director of Georgia State’s Economic Forecasting Center and principal author of the forecast, said Georgia’s exports grew by 15 percent in the 4th quarter of 2007, compared with 11.3 percent average U.S. growth.

The center’s quarterly economic report card gave the state an “A” in the exports category, citing China and the European Union as major customers for Georgia products.

Canada remained the state’s top export destination, despite a 2.7 percent drop from 2006 in total exports to the country.  China was the second-largest destination, posting 10.8 percent growth from 2006.

Despite an 8 percent drop from 2006, the U.K. was the third largest destination for Georgia products, followed by Mexico and Germany, which increased their consumption by 2.1 and 0.6 percent, respectively.

Transportation equipment remained Georgia’s largest export products despite a 21.6 percent fall from 2006, linked in the report to Canda’s lower consumption.

The report challenges the idea that China’s outstanding growth will continue in the wake of the 2008 Beijing Olympics, predicting a slowdown due to reduced construction and hospitality sectors, similar to Atlanta’s situation after the Summer Games in 1996. 

Dr. Dhawan said that Atlanta’s post-Olympic growth slowed for about six months, but China may experience a more long-lasting effect because of reduced consumer confidence in the U.S., its largest trading partner.

He added that a fall in U.S. consumption in 2008 would affect economies across the globe.

“When the biggest consumer in the world (the United States) takes a breather, its suppliers—whether BMW of Germany or the Chinese supplier to Wal-Mart—will suffer, period,” the report said.

In addition to lowered consumption, the report cites falling house prices and job losses as challenges for the U.S. and Georgia economies in 2008.