Savannah Chamber

32 Albany's role as a regional center for healthcare weighs strongly in its favor, but the MSA's sub-par population growth as well as Georgia's non-participation in the expansion of Medicaid limits the prospects for this industry's growth. To prosper, Albany's healthcare industry will have to pull many more patients from surrounding areas. The proposed Lee County Medical Center may open in late 2020 or in 2021. It should support several hundred jobs, but many of those jobs will represent business/patients that transferred from incumbent healthcare providers and therefore will not be net new jobs. Retiree-focused businesses have good prospects for short- and long-term growth. The new terminal at the Southwest Georgia Regional Airport will benefit the regional economy. Albany will continue in its historic role as a regional retail-wholesale-distribution center. Automation and online competition will prevent retail trade from becoming a reliable source of job growth, however. Small numbers of retail jobs will probably be lost in 2020 even as retail sales expand. Albany will benefit from its traditional role as a support center for agriculture, but high dependence on agriculture does expose the regional economy to the trade tensions as well as vicissitudes of the weather, commodity markets and federal farm policies. Redevelopment along the Flint River adds to Albany's charm, and adds to the area's potential to benefit from tourism and retiree-based development. The leisure and hospitality industry should expand in 2020. The Rails to Trails project and the new airport terminal also will help the tourism industry. Albany's tourism industry is about equally dependent on business and leisure travelers, and that diversity lends some degree of stability to the market. A high proportion of government jobs makes Albany vulnerable to the restructuring of government. Over 2010-2019, Albany lost about one out of every seven of its government jobs, with significant losses of federal jobs, state government jobs, and local government jobs. Due to the presence of the Marine Corps Logistics Base (MCLB), Albany is dependent on federal jobs – 8.7 percent of the Albany area's non-farm earnings come from federal employment versus 5.1 percent for the state and 3.9 percent for the nation. The MCLB is the area's top employer. Because DOD spending will probably increase in 2020, the immediate prospects for the MCLB are good. President Trump's budgets are likely to favor bases with missions similar to that of the MCLB. In addition, pay raises for troops are expected. Future problems with the federal budget are looming, however, which is a long-term risk for the area's economy. Albany's dependence on government spending is not limited to federal spending. State and local government accounts for 15.4 percent of earnings versus only 10.7 percent for the state as a whole. Additional public restructuring at any level of government therefore could be more problematic for Albany's growth than for either the state's or the nation's long-term growth. Another serious problem is that the area's population and labor force have been declining for many years. In addition, compared to the Georgia average, Albany has relative fewer people within the 25 to 49-age bracket, typically the most productive years, professionally. Out-migration has weighed very heavily on the area's economic performance as well as it prospects for economic growth. The Albany MSA's relatively low earnings and a scarcity of high-tech jobs push residents to look elsewhere for jobs. Net migration has been negative, and it is likely to remain negative in 2020. The top destinations of people leaving Albany include Atlanta, Columbus, Jacksonville, Warner Robins, Tallahassee, Tampa, and Valdosta. On the plus side, it appears that over the last two years net migration has become less negative than in prior years. Population stability is within reach. If achieved, population stability would provide a firmer foundation for economic growth, especially for household-dependent businesses. Home prices are recovering much more slowly in Albany than at either the state or national levels. The slow recovery of the area's home prices reflects out-migration, a paucity of household formation, and not enough growth in the number of high-wage jobs. In the Albany MSA, existing single-family home prices peaked in the first quarter of 2008, but did not bottom out until the second quarter of 2014. From peak to trough, home prices declined by 16 percent, which is much smaller than the decline experienced by the state. Home prices are recovering very slowly in the Albany market, however. As of the third quarter of 2019, Albany's home prices were still eight percent below their peak levels, but was up 3.5 percent on a year-over-year basis. The failure of home prices to recover from the Great Recession will restrain entrepreneurial activity and the growth of consumer spending, especially spending on home improvements.

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