SKIP TO SITE NAVIGATION | SWITCH TO GRAPHICAL VERSION
First Union Economic Analysis: Georgia Posts Solid Economic Growth in Second Quarter Even with the economy slowing during the spring months, Georgia's economy remains the picture of health, according to analysis by First Union economist Mark Vitner. First Union's measure of Georgia's Gross State Product grew at a 3.3% annual rate during the second quarter, compared to a 5.4% pace in the first quarter. Nationally, Gross Domestic Product growth slowed to a 1.8% pace. Over the past year, Georgia's economy has expanded 5.3%, while the nation's GDP grew 3.9%, continuing a string of 37 consecutive quarters that Georgia's economic growth has topped the nation's. "It's hard to find many weak spots in Georgia's economy right now," noted Vitner. The slight moderation in economic growth during the second quarter was caused almost entirely by an odd swing in construction activity within the state. Mild winter weather allowed residential and commercial construction to get off to an unusually strong start earlier this year, resulting in little additional pick up this spring. On a year-to-year basis, construction activity is still very strong, with activity up a solid 9.4%. Manufacturing output climbed at a 3.7% annual rate in the second quarter and 4.4% over the past year, with nearly every industry posting production increases. Output of industrial machinery, including construction equipment and machine tools soared at a 15% rate during the second quarter. Aircraft assembly is another bright spot, with production rising at a 6% pace. "Most of that increase appears to be at Gulfstream's business jet operations in Savannah," noted Vitner. Recent cutbacks at Lockheed and Boeing in Atlanta did not show up in the second quarter numbers. Georgia's carpet producers also saw production and payrolls increase, with output up 3% over the past year. The rest of Georgia's textile and apparel industry was not as fortunate. Output and payrolls continued to decline. The pace of cutbacks, however, appears to be moderating and a few textile plants are even modernizing and expanding. Georgia's wholesale trade and distribution industries enjoyed a brisk business this past spring. Output in wholesale trade grew at a 4.9% pace and trucking firms and warehouses saw business climb at a 6.0% pace. Demand for warehouse and industrial space remains exceptionally strong in the Atlanta area and has also picked up in Savannah and Augusta. "E-commerce is a powerful driver for Atlanta's distribution sector," noted Vitner. First Union Economic Analysis: Georgia Posts Solid Economic Growth In Second Quarter - Page 2 Output in waterborne trade grew at a 10% annual rate during the second quarter, as container traffic through the Port of Savannah soared to an all-time high. The growth in container shipments is fueling new investment around the port, including construction of a new 150-acre intermodal container transfer facility. The port is also helping draw in new industry. Financial service providers saw output climb at a 6.4% pace the spring, with brokerage firms and mortgage brokers posting the strongest gains. Resales of existing homes averaged a 129,200-unit pace in the second quarter, up 13.1% from last year. New home sales are running about 10% ahead of their year ago pace, with the strongest gains in the Atlanta area. Growth in high tech services averaged an 11.1% pace in the second quarter and is up 12% over the past year. The strongest gains continue to be in data processing and communications. "The high tech sector will continue to be Georgia's fastest growing industry for the next few years," said Vitner. |
About Wachovia