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Dr. Don Mathews presents the annual economic outlook
Posted 01/22/2016 09:27AM

See the video here.

By LINDSEY ADKISON The Brunswick News

Glynn County and Albany have something in common.

The Metropolitan Statistical areas they're in are the slowest in the state to recover from the Great Recession, said Don Mathews, professor of economics at College of Coastal Georgia, during the annual economic outlook luncheon on Jekyll Island Thursday.

Members of the local business community gathered at the Jekyll Island Convention Center to hear Mathews and other economists offer insight into what 2016 will bring to Glynn County and Georgia as a whole.

"One of the questions that comes to mind is why it's been so hard for us to recover from the 2007, 2009 recession, and there are a lot of reasons, particularly if you take a closer look at the state of Georgia," Mathews said.

The Brunswick MSA is made up of Glynn, McIntosh and Brantley counties; the Albany MSA is made up of Baker, Dougherty, Lee, Terrell and Worth counties.

Mathews said the larger economies have recovered fastest, noting Atlanta and Savannah as two areas that have bounced back most effectively.

"What we see in Georgia and in the nation is that, in general, large local economies have recovered fairly nicely from the recession," he said. "Small local economies have had more difficulty recovering, and rural areas are really struggling.

"We are like Albany in that we are a small, local economy. Other small local economies in Georgia are having some difficulty, too, but of the 14 Georgia MSAs, Albany and Brunswick, especially Brunswick, have had the most difficult time recovering."

Mathews said one of the biggest reasons for this is the state of the local labor market, particularly the lack of labor mobility.

"People are not moving from one place to another as readily as they did 15 years ago. That's a problem for firms that want to expand, especially firms that need skilled or specialized workers," he said.

"If a firm can't get workers to move to it, it will move to the workers. It will move to places with big labor forces — cities rather than towns. That puts smaller communities such as ours at an immediate disadvantage."

While that is a problem, there are ways to mitigate it. Mathews said creative thinking and innovation will be key to combating this.

"How do we become the exception to this rule? I think what it means is that we have to be smarter and more creative and more enterprising than most communities in order to buck this trend," he said.

"Education is hugely important, but so are other things that we've talked about before like the gateways and developing the waterfront in downtown Brunswick."

Another issue Mathews shared was concern over the local gross domestic product or GDP. It's a solid indicator of the area's standard of living, and the picture it paints is not entirely positive, he said.

"The gross domestic product is a measure of the value of an economy's production — and income generated from production — over a period of time, usually a year. GDP per person is, in my view, the best single measure of living standards," he said.

"In our area, GDP and GDP per person have decreased each year since 2006. That means, in aggregate, our living standards are falling. It also means that the large gap between living standards in the nation — which are much higher than ours already — is getting even larger."

Mathews speech certainly wasn't all doom and gloom. He pointed to a number of local industries that are doing quite well, tourism ranking No. 1 with double digit growth.

"We've had several key sectors that did really well in 2015. The hospitality and tourism industry, this sector has really been on fire for the last five years. We've had five consecutive years of 7 percent growth. We've had two consecutive years of double digit growth. And in 2015, 10 out of the 12 months last year were records."

The port, he added, saw positive returns, setting new records in the past year. Mathews also noted that residential construction is improving.

"That's something I haven't said for years," he said. "Residential construction projects were up 16 percent. Real estate is up 9 percent and we haven't seen growth like that in a very long time. But to put it in perspective, the level of activity we saw in 2015 was about 40 percent of what we saw in 2006, the big boom year."

Mathews said the retail trade has been sending mixed signals.

"Retail trade activity increased by 2 percent in our six county region in 2015, and Glynn was responsible for all of the increase. Retail activity in the other five counties (Brantley, Camden, Charlton, McIntosh and Wayne) fell in 2015," he said.

Benjamin Ayers, dean of the Terry College of Business at the University of Georgia, shared the college's projections for the year and what's to come. He said 2016 should bring growth and prosperity. He expects that Georgia, as a whole, will grow at a better rate than the nation.

He predicts that the state's GDP will grow at a stronger rate than the rest of the country. Personal income for the state will also increase, which is another major positive for Georgia.

Overall, Ayers said, the state's poised for good things in the new year.

"The good news is that Georgia's economy will continue to grow in 2016 and will expand faster than the national economy," he said. "There are four key things that are contributing to this. One is that Georgia has a large number of economic development projects. Secondly, Georgia's economy is going to get much more leverage on the housing recovery. Third, we're going to see much faster population growth in Georgia relative to the nation. Finally, the continued low gas and oil prices will really help since Georgia is an oil consuming, not an oil generating, state."

After the presentations, both took questions from the audience. Among other things, the possible incorporation of St. Simons Island was addressed.

"I don't know what the answer is," Mathews said. "I know nothing about local government and how they are organized. That's just not my gig. I would just say Balkanization in a community is a horrible thing. It's a tremendous obstacle to growth and development. That's one thing I will say.

"Another thing is it seems to me that St. Simons development ... the gateways and the other development on the mainland, public investment like on the waterfront — (they're not) not three separate things. It's one thing. It's 'How do we best take care of what we have?' And I don't know if incorporation is the answer to that."

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