Savannah Chamber

20 14 average age of a vehicle in the US rose to 12.6 years, which is a record high. That bodes well for vehicle sales in 2025. 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. Georgia is developing as nexus of the electric vehicle manufacturing industry. Hyundai Motor Group and LG Energy Solutions' 2022 decision to invest over $5.5 billion in Bryan County at their first fully dedicated electric vehicle and battery manufacturing facility will create 8,100 jobs. In 2023, Hyundai Motor Group and LG Energy Solutions doubled down on that decision and announced plan to invest an additional $2 billion. In total, the $7.6 billion joint venture, dubbed the Hyundai Motor Group Metaplant (HMGMA) will create 8,500 jobs over the next eight years and will be able to support the production of 300,000 electric vehicles annually. Operations at the electric vehicle/battery manufacturing joint venture in Bryan County are expected to begin in 2025. The IONIQ 5 will be the first model built at the HMGMA. The Georgia Department of Economic Development is focused on creating an ecosystem that supports the entire electric vehicle supply chain. Vehicle parts manufacturing projects announced will bolster growth in Georgia's vehicle and vehicle parts manufacturing industry. Projects announced in 2023-24 include Doowon Climate Control America, Syensqo, GF Casting Solutions, Ecoplastis Corporation, SK Battery America, Sewon America, Seohan Auto Georgia, Hanon Systems, PHA, GRUDEM, Woory Industrial, NVH Korea, Kia, Hyumdai Motor Group, LG Energy Solutions, DAS Corp., Daechang Seat Corp. USA, F&P Georgia, Hwashin, Hyundai Industrial, and Toyota Industries Corporation. Effective economic development policies as well as rising wages and production costs in China – and other overseas locations – are factors that support Georgia's manufacturing sector. Concerns about trade policies, product quality and management of the risks associated with increasingly complex – time- sensitive – supply chains also make manufacturing in Georgia more attractive than manufacturing overseas. Additional factors that will help Georgia attract manufacturers include a superior transportation, logistics, and distribution infrastructure, low costs of doing business relative to other advanced economies, a favorable tax structure, highly ranked colleges & universities, excellent work-force training programs such as Quick Start, and extremely competitive economic development incentives. Prospects for State and Local Government In 2022-24, higher revenue collections and federal largess reversed the downturn in state and local government jobs. The upturn in hiring by government was much delayed compared to hiring in the private sector of the economy. In addition, the upturn was not vigorous because it was well understood that stimulus funds received by state and local governments from the federal government were unlikely to repeat. Surpluses therefore were better used to cover one-time or temporary expenditures instead of new programs or new hires. Nonetheless, state and local governments contributed to 2022-24 employment growth and will do so again in 2025. Although the economic slowdown will slow growth in state and local government revenue collections, inflation will help prevent revenues from declining. Indeed, local governments' revenue collections will increase strongly due to the lagged effects of the recent housing boom on property tax digests. In most jurisdictions, local government will boost hiring faster than state government. That is because compared to state government, local governments depend more heavily on property taxes and fees for services and less heavily on sales and income taxes. Revenues generated by property taxes and fees typically are far less cyclical than revenues generated by sales and income taxes. Due to the post pandemic-recession housing boom, most local governments will generate revenue sufficient to sustain and expand programs. While we do not expect residential real estate prices to increase very much in 2025, but it is highly likely that assessed residential property values will rise more substantially because assessed values lag market prices by a year or more. In 2020-24, there was heavy spending for major home improvement projects (e.g., swimming pools) that will add to residential property tax digests. In

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