Savannah Chamber

21 7 at a slower pace. The prospects are different for various segments of Georgia's hospitality industry. First, leisure travel will hold up better than business travel. Short-trips by car to visit relatives or friends have come back faster than long-trips to attractions or events – especially if the trip involves travel by air. Within the business travel segment, trips to see clients and to make sales calls will continue to grow. Second, domestic travel will continue to outperform international travel. That observation applies to both leisure and business travel. Third, prospects for the lodging industry vary by property type. Due to the economic slowdown, economy and midscale properties probably will fare best. Upscale and luxury properties catering to group/convention travelers, inbound international travelers, and fly-to leisure/business travelers probably will fare worst. Full recovery for such properties could take many years due to structural changes such as the widespread substitution of videoconferencing for in-person events. Prospects for Manufacturing Manufacturing is cyclically sensitive and depends heavily on complex supply chains and export markets. In 2023, we expect production by Georgia's manufacturers to hold up much better than production by US manufacturers. In Georgia, manufacturing output probably will increase even with the US and global economies in a mild recession, but the pace of manufacturing output growth will slow. One reason Georgia's manufacturing sector will outperform the nation's manufacturing sector is that Georgia saw many manufacturing economic development projects announced in 2020-22. Those projects – as well as some announced in prior years – will continue to build out and become operational, contributing to the comparatively large increase in industrial production we expect for Georgia. We expect supply chain problems to gradually diminish, which will support both Georgia and US manufacturing. Due to persistent shortages of critical inputs and other supply chain problems there's will be a need to produce more in many, but not all, product categories. We expect the number of manufacturing jobs in Georgia to increase in 2023, but the nation may lose some manufacturing jobs. Georgia's largest manufacturing industry is food processing. Indeed, Business Facilities magazine ranks Georgia sixth as a leading state in food processing. Georgia's food processors fared relatively well during the pandemic, accommodating to higher sales to grocers and lower sales to restaurants and institutions. In 2023, we expect the food processing industry t o do well. Many of the economic development projects announced over the last few years were food processors. Food production therefore will increase in Georgia in 2023. Agribusiness and food processing projects announced in 2020-22 include PepsiCo Beverages, Jack Link's, AFB International, MANA Nutrition, American Peanut Growers Group, King's Hawaiian, Bimbo QSR, Nestle Purina, Anheuser-Busch, BANG ENERGY, Sugar Bowl Bakery, Kerry Group, Batter Up Foods, Frito Lay, Coffee Cake Bakery and General Mills. In 2023, Georgia's vehicle and vehicle parts manufacturing industries will benefit from higher domestic demand for vehicles. In addition, supply chain problems are expected to diminish, which will enable the industry to increase production to more fully meet consumers' pent-up demand for vehicles. The average age of a vehicle in the US is 12.2 years, which is a record high. That bodes well for vehicle sales in 2023. Political pressures that encourage foreign manufacturers to invest more in US production facilities and to buy automotive parts from US manufacturers will help. In addition, there are more assembly plants in the Southeast in the wake of the COVID-19 recession than in the wake of the Great Recession. Georgia is developing as nexus of the electric vehicle manufacturing industry. Hyundai Motor Groups decision to invest over $5.5 billion in Bryan County at its first fully dedicated electric vehicle and battery manufacturing facility will create 8,100 jobs. Operations are expected to begin in 2025. Since 2020, Georgia has announced more than 20 electric vehicle related projects that will create almost 18,000 jobs. Vehicle parts manufacturing projects announced in 2020-2022 that will bolster growth in Georgia's vehicle and vehicle parts manufacturing industry include Rivian, KB Autosys, Kirchhoff Automotive, Hyundai TRANSYS Hyundai Motor Group, Georgia Seating System, Duckyang, American Trailer World, GEDIA Auto Group, SK Innovation, Enchem, TEKLAS, Dongwon Tech Corporation, and JinTech America.

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