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2018 Savannah Economic Trends

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19 Economic Development Because it often takes many years to build out the typical economic development project, many of those announced over the last five years will continue to provide a substantial tailwind to Georgia's economic growth in 2018 and beyond. Examples of large economic development projects announced in 2017 include: ASOS, an online fashion and beauty retailer, will establish an East Coast e-commerce fulfillment center in Fulton County creating more than 1,600 jobs; Luxottica Group will create 1,000 jobs with the expansion of its North American distribution facility in Henry County; Sonoco Products Company will create 595 jobs in a new packaging center in Fulton County; athenahealth will double its workforce from 500 to almost 1,000 at its health IT facility in Atlanta; Sysnet Global Solutions will create more than 500 jobs at its cybersecurity and financial payments support center in DeKalb County; and Pratt & Whitney will create over 500 jobs in an expansion of its facility in Columbus. Some of the largest economic development projects announced in 2016 include: NCR with over 1,800 jobs at its global headquarters in midtown Atlanta; and Anthem's 1,800 IT jobs at its IT service hub in Atlanta. Convergys will boost its workforce to about 1,300 workers due to new operations in Columbus and Savannah; UPS will create 1,250 jobs at a new sorting and distribution hub in Atlanta; and Home Chef's decision to open a new facility in DeKalb County will create over 1,200 jobs. Sparta Industries, a manufacturer of HVAC components, will create over 1,000 jobs in Milledgeville. Another reason Georgia is doing well is that the U.S. automobile manufacturing industry is becoming increasingly concentrated in the Southeast. When it comes to both distribution and consumer 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 railroads. Georgia's major projects have included Kia's assembly plant in west Georgia and Mercedes' corporate headquarters in Atlanta. The new Volkswagen assembly plant just across the state line in Chattanooga and the recent announcement that Volvo will build an assembly plant in Charleston make Georgia an even more attractive place to site car parts suppliers. For example, Carcoustics will create 200 jobs near Buford that will supply auto parts to plants in the Southeast. Automotive Body Parts will expand its operations in Bartow County, adding 150 jobs. Constellium, a manufacturer of aluminum products for the automotive and other industries, is establishing operations in Barrow County, creating over 150 jobs. NIFCO KTW is locating its U.S. operations in Toccoa, creating 200 jobs. Sentury Tire will create more than 1,000 jobs in LaGrange. One short-term problem, however, is that U.S. auto sales are expected to decline in 2018, but replacing cars damaged by recent hurricanes may provide an upside sales surprise. 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 began to bear more fruit in the past five years because Georgia eliminated sales and use taxes on energy used in manufacturing, and emphasized 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 that attract businesses with high-paying jobs. Over time, this approach 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 85 percent of counties already have level one Freeport exemptions. These changes in tax policy will boost Georgia's economy in 2018 and beyond. Housing Recovery The outlook for the homebuilding industry is very good. Housing and real estate development therefore will be a powerful driver of Georgia's economy in 2018, helping the state's economy to outperform the nation's economy. The number of single-family home starts for new construction will increase by 16 percent; new multi-unit construction will rise 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

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