Posted: Tuesday, October 4th 2011 at 11:08am
Economic expert provides area forecast
By Marc Eggers Staff
GAINESVILLE – "Gainesville is a town that has done quite well over the last decade. It’s developing a reputation for its very strong pro-business environment," were the words of Dr. Roger Tutterow, Professor of Economics at Mercer University.
Tutterow was speaking for the second consecutive year to a group of approximately 80 civic, financial, and business leaders at the Georgia Mountains Center Tuesday morning.
Michele Piucci, Vice President of Chattahoochee Bank of Georgia, which was sponsoring the event, said, "We were quite surprised (last year) that he had a lot of positive things to say…so we’re looking forward to what he has to say today."
"We still believe the economy did have the recession end in the summer of 2009. When we say a recession ended, what we’re not saying is that things got back to normal at that point…things stopped getting worse," Tutterow began.
But Tutterow was quick to add, "On Main Street America, on Peachtree Street in Atlanta, on Jesse Jewel Parkway in Gainesville, it doesn’t feel like the recession ends until the job creations come back in a meaningful manner."
"The problem is that we have not seen the kinds of recovery we would like to see."
"Do I think that we will get a full-blown recession? I do not," Tutterow stated.
Tutterow explained that because so many jobs in Georgia are related to the real estate and construction industry – from lumber production to carpets and flooring to mortgage loans – that our state will see job restoration at a slightly slower pace.
"We lost so many jobs nationwide and here in Georgia during the 2008-2009 recession, we need many more years of job creation to get back to where we were."
"Between January 2008 and January 2010 we dropped 8.8 million jobs nationwide. If during a normal economy we add about 200,000 jobs a month…it takes 44 months to make up the jobs you have lost."
On the real estate front Tutterow said, "I believe that home prices have bottomed out, and are today roughly in line with fair value."
"When we see home prices start rising again we should be thinking of numbers like 3 to 5 percent for appreciation, not numbers like 10 to 15 percent."
Another issue addressed by Tutterow was bank failures, an area where Georgia leads the nation. "We lost a lot of banks in Georgia because…we had a lot of banks. We had a long culture…in the idea that your could not cross county lines without having a charter in that county."
"The good news is this: we are approaching the end, gradually, of this banking crisis.”"
Tutterow’s message was generally upbeat and optimistic, but one area he predicted a disappointment to arise was entitlements for Baby-Boomers.
As the first of that generation become eligible to begin collecting Social Security and Medicare, Tutterow said something will have to change.
"My belief is that you will see the age at which you qualify for Social Security and for Medicare likely pushed to a later age," Tutterow cautioned.
"At the end of the day this is an economy that has taken shot, after shot, after shot for the last ten years. Year, after year, after year this economy takes shots, comes back, creates jobs, grows output and improves the standards of living for our families," Tutterow said, summarizing his economic forecast.
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