Savannah Chamber

23 Rover Classic announced that it would build a new operations hub in Savannah. In late 2017, Daesol completed construction of their new automotive fiber manufacturing facility in Harris County, creating 110 jobs. In 2017, Carcoustics indicated that over the next five years it will create 200 jobs near Buford that will supply auto parts to plants in the Southeast. Due to cost, logistics, and tax advantages, Georgia is very competitive with other states when it comes to landing economic development projects. Many companies move to Georgia to cut costs. As noted above, these advantages began to bear more fruit in 2012-18. That is partially because Georgia made several strategic shifts in its economic development strategy, including the elimination of sales and use taxes on energy used in manufacturing, and a greater emphasis on workforce training as an economic development policy. Job training programs and new highly specialized workforce training centers will increase the supply of highly skilled workers thereby attracting businesses with high- paying jobs. Overtime a workforce centric approach towards economic development should raise both productivity and per capita incomes. The exemption for energy used in manufacturing was phased in and reached 100 percent in 2016. In addition, in 2016, business inventories became fully exempt from the state property tax and most counties – 85 percent – already have level one Freeport exemptions. These changes in tax policy will boost Georgia's economy in 2019 and beyond. Legislation has made Georgia more competitive, but Georgia will have to be very aggressive in closing the right deals. Georgia should target industries that expand the economic base and have good potential for long-term growth. Georgia must invest strategically and grow clusters in areas ranging from biotechnology to advanced manufacturing. The focus should be on innovation-based companies. Of course, Georgia must also make sure that its statutory incentives remain competitive – the statutory incentives help to get Georgia short-listed by site selection professionals. Then, only after Georgia is short-listed, do those critical deal-closing incentives come into play. A review of economic development announcements issued by the Office of the Governor and the Georgia Department of Economic Development indicates that economic developers are closing many deals in industries in which the state has the ability to produce at a low opportunity and marginal costs – comparative advantage. Specialization in activities where Georgia has comparative advantage bodes well for sustained success of the companies that received incentives thereby enhancing the prospect for long-term economic growth. Logistics, transportation, distribution, warehousing, information technology, transactions processing, headquarters operations, floor coverings, automotive parts, food processing, and professional and business services are good examples of industries where Georgia competes effectively. Housing Recovery Home building and real estate development have long been extremely important to Georgia's economy. This traditional driver of growth finally got traction in 2012 and continued to move forward in 2013-18. Although existing-home sales have peaked, sales of new-homes and new-home construction will move higher in 2019. That dynamic is very positive for economic growth because new-home construction and new-home sales contribute substantially more to state GDP than sales of existing homes. Job growth, improving demographics, and the limited supply of older homes that are on the market will boost new home construction. The 2019 outlook for the homebuilding industry therefore is good. Housing and real estate development will be a driver of Georgia's economy in 2019, helping the state's economy to outperform the nation's economy. The number of single-family home starts for new construction will increase by 9%, but due to shifting preferences as well as the recent completion of many projects new multi-unit homebuilding will decline by 4 percent. Georgia gets a five for one from the housing recovery because (1) home builders and realtors benefit directly and (2) demand increases nationally for goods produced by Georgia's large floor covering, building materials, and forestry industries. Plus, (3) our large transportation and logistics industry benefits from higher levels of activity in construction – a very transportation intensive activity. In addition, (4) recent and continuing increases in U.S. home prices will make it even easier for companies and people to relocate to Georgia. Finally, (5) the home equity generated via home price appreciation will boost small business formation and expansion as well as consumer spending.

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