Unemployment is predicted to be a full point behind state.

By Walter C. Jones
The Times Union

ATLANTA - The Brunswick economy has one of the brightest outlooks in the state, according to Georgia State University's quarterly forecast released Wednesday.

"The star metro areas will be Savannah, Brunswick, Warner Robins and Gainesville," the report's authors wrote.

Brunswick is expected to add 610 jobs this year at a 1.4 percent pace, slightly lower than the forecast rate for the state as a whole of 1.5 percent. But the city’s projected unemployment rate of 3.4 percent is much lower than the state forecast of 4.4 percent.

“Brunswick is again benefiting from the international ports component,” said Rajeev Dhawan, director or the university’s Economic Forecasting Center.

As a whole, Georgia will see an economic slowdown, as will the rest of the country, but no recession is likely, Dhawan said.

“The national woes are not going to go away from us. We’re not immune to it,” he said.

What’s slowing the economy’s growth is a credit crunch that began with a rise in mortgage defaults by borrowers who had imperfect credit when the banks made their loans. In response to the increased rated of defaults, lenders have become reluctant to make loans to the so-called sub-prime borrowers, and investors have shunned mortgage investments, combining to created a shortage of cash for new deals.

Conrad Ciccotello, professor of personal financial planning at Georgia State, said the economy moves in cycles. It just completed a cycle in which people bought bigger houses because their neighbors did, which caused the housing market to expand.

“I’ve got to believe short term we’re in some kind of compression cycle. But the difference between now and the ‘30s is we have the Federal Reserve to provide security,” he said.

Dhawan warned that an unusually large share of Georgia’s current job growth has come from stores, tourism, schools, and hospitals, representing 65 percent of the jobs created in the last three months. Growth that unbalanced toward the service sector and not including manufacturing can’t last for long, he warned, especially when the effects of the credit crunch weaken consumer spending.

Still, he didn’t revise his forecast downward in light of the recent economic news. He’s still predicting modest growth for Georgia, with jobs expanding by 1.5 percent and unemployment shrinking to 4.4 percent.

Interest rated cuts by the Federal Reserve Bank, he said, would be in time to keep the economy moving forward.