LAI Atlanta Chapter Meeting | January 16, 2020
Speaker: Tom Cunningham, Chief Economist, Metro Atlanta Chamber
Location: Metro Atlanta Chamber
LAI Chapter President Bill de St. Aubin opened by welcoming new members in attendance, Dawn Brown and Mark de St. Aubin. He shared that the chapter is planning monthly meetings throughout 2020 and invited members to the next meeting on February 25, a discussion on the chapter’s mission and vision.
Stephen Causby introduced Tom Cunningham, who has been a professor and researcher for many years. He worked previously at the Federal Reserve Bank of Atlanta and tracks national and regional economic trends.
Tom shared his thoughts on the current economic situation and discussed potential developments in 2020 (no PPT slides).
From the 1950s, Atlanta developed as the center of labor and logistics in the southeastern United States. Because of this cluster Atlanta grew faster than other cities in the region and became a draw for labor across the country. As a result, Atlanta’s population began to mirror that of the nation. Atlanta’s economy reflects that of the broader U.S.
The Metro Atlanta Chamber (MAC) does economic development and public policy. Though Atlanta doesn’t have a recognizable ‘brand’ like other cities, it has become known as a place that holds a low risk for relocation for businesses. It has great access to talent and professional services. The Atlanta region’s economy is larger than that of Norway, and almost of Austria. The risks and stability of the overall U.S. economy is reflected in the metro economy too.
Tom advised that 2020 will be slower than 2019 – around 2% growth. We have a significant labor problem. Our workforce is growing at 0.8% per year, so faster growth is difficult. We are experiencing slow growth in part because of the retirement of baby boomers.
Plant equipment and intellectual property sectors are coming in weak. Policy uncertainty around supply chains is a slowing factor in the economy. The region is close to full employment at the current time.
People are holding off on major investments, driven by uncertainty around supplies and manufacturing. However, we could see an upswing because the capital and market are there.
State and local governments are in a good financial situation, and drive much of the spending.
South Georgia has been hit hard by recent ups and downs in trade. Trade discussions haven’t been enough to derail the economy, but studies show U.S. consumers are bearing all the burden of recently enacted tariffs.
The Labor Market. Median wage gains are around 3%, we should be seeing higher. The share of people working part time, but who desire full time employment, has grown sharply. Employers can offer existing employees more hours at prevailing wages, and they will take them. As long as we see that dynamic, wages won’t go up.
Targets for Growth. New college graduates are dynamic. Big 10 schools are a target for new graduates moving to the area. Middle aged families are also moving here.
We could do a better job of working to retain existing college students in the region – about 300K. Georgia Tech’s Engineering students are underappreciated – the program is larger than Berkley and Stanford’s combined. Firms start up in the Valley, and they scale in Atlanta. Biotech and financial tech are growing sectors.
The next slowdown will be due to capacity – workforce development is the key. Atlanta doesn’t do a great job of developing incumbent talent. Atlanta also has low economic mobility for those born into poverty. This is related to housing, transit, education – many factors. We are leaving money on the table.
Tom closed with Q&A. He shared that jobs will keep pace with new growth, as that is the driver for many people’s move to the region. He also advised that we need to retain university graduates, or jobs will go unfilled.
Three guests were present. We have a couple of vacancies on the chapter board – in programs and communications. Doug Stoner has agreed to chair the memberships committee.
The next meeting will be the evening of Feb. 27 at Sizemore offices downtown. Wine and beer, discussion of chapter mission.
Meeting notes submitted by LAI Atlanta Chapter Secretary Stephen Causby