Savannah Chamber

24 10 markets, Georgia is in the sweet spot in the middle of the Southern Auto Corridor with proximity to major assembly plants, major suppliers, interstates, ports, and rail. Since the pandemic began, Georgia has had good success growing the electric mobility industry. For example, Hyundai Motor Group will invest $5.5 billion to build its first dedicated electric vehicle and manufacturing plant in Bryan County, creating 8,100 jobs. Another example, Rivian will create about 7,500 jobs at a new $5 billion electric vehicle manufacturing facility in Stanton Springs. SK Innovation announced that it would build a battery manufacturing plan in Jackson County that will create 600 jobs. In a closely related move, Enchem announced that it will build two new manufacturing plants in Jackson County, creating over 300 jobs. In 2021, Duckyang, a Korean manufacturer of automotive battery modules and energy storage systems for SK Battery America announced that it would build its first U.S. manufacturing facility in Braselton. The new facility will create 285 jobs and will supply electric vehicle parts as well as interior vehicle parts. Additional automobile manufacturing announcements in 2021 include American Trailer World, KB Autosys, Hyundai TRANSYS Georgia Seating System, and Kirchhoff Automotive. 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. These advantages bore fruit in 2012-21. That is partially because Georgia made several strategic shifts in its economic development strategy, including 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. Georgia's workforce centric approach towards economic development attracts business, raises workforce productivity, and boosts per capita incomes. The skills learned are portable, ensuring that the benefits of such incentives endure. 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, such as electric vehicle manufacturing. 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 announcemen ts 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, electric vehicle manufacturing, software/technology, FinTech, digital media, cyber security, transactions processing, headquarters operations, floor coverings, building materials, automotive parts, food processing, and professional and business services are good examples of industries where Georgia competes effectively. Housing Market Conditions Housing is one of the most interest sensitive sectors of Georgia's economy. It is the canary in the coal mine when it comes to detecting recessions. Shortly after the Federal Reserve pivoted from easy money to tight money mortgage rates soared, essentially doubling. That sudden, aggressive policy shift quickly ended the post-pandemic housing boom. Housing market activity peaked early in 2022. Georgia's housing market will remain in recession in 2023. Although mortgage rates are not high from a historical perspective, mortgage rates are much higher than in recent years. That's the main, but not the only, factor behind the 2022-23 housing downturn. The sharp runup in home prices from mid-2020 through mid-2022 is a second factor behind the housing slump.

• Cover