Georgia, nicknamed the Peach State, is the largest U.S. state east of the Mississippi River in terms of area and also is one of the original 13 colonies, founded in 1732. The state has a rich history that includes the dubious distinctions of having been the slave state with the largest number of plantations in the South and for being the site of Gen. William Tecumseh Sherman’s infamous march to the sea during the Civil War — in which Sherman and the Union army cut a path of fire and destruction from Atlanta to Savannah.
Georgia is the birthplace of U.S. civil rights icon Martin Luther King Jr.; former President Jimmy Carter; and baseball legend Jackie Robinson, the first African-American player in Major League Baseball. The Peach State also is home to 21 Fortune 500 companies, 16 of which are headquartered in Atlanta. The state’s major employers include The Home Depot, United Parcel Service, The Coca Cola Co., Delta Air Lines, Aflac Inc. and SunTrust Banks Inc.
Georgia’s economy is quite diverse. Technology, manufacturing (including automotive and aerospace), agriculture and tourism account for some 40 percent of the state’s economic output as measured by gross domestic product (GDP). Other major economic nodes include financial technology, cybersecurity and the creative industries.
Georgia is home to some 100 fintech companies, including six of the largest payment-processing companies in the nation. The state also boasts at least 115 cybersecurity companies that generate some $4.7 billion in annual revenue, according to the Georgia Department of Economic Development. Georgia is home to media giant CNN and is the third most popular filming location in the nation, behind California and New York — thanks in large part to the generous tax incentives Georgia offers to movie- and television-production companies.
The Peach State’s robust economy is underpinned by its logistics infrastructure. It boasts the fourth-largest container seaport in the nation, the Port of Savannah, as well as the busiest airport in the world in terms of passenger traffic— Hartsfield-Jackson Atlanta International Airport, which serves in excess of 100 million travelers annually.
All of this economic firepower contributed to Georgia’s respectable GDP growth in 2017 of 2.7 percent, exceeding the national GDP growth mark that year of 2.1 percent. Over a longer term, however, the state’s economy has slightly underperformed the U.S. economy.
Georgia recorded a compound annual growth rate of 1 percent over the 10 years through 2017, compared with the national GDP growth rate over the same period of 1.2 percent. During first-quarter 2018, that pattern continued, with Georgia’s GDP growing by 1.6 percent, compared with the national mark of 2.2 percent for the quarter. A quarter later, the state’s GDP growth hit 3.9 percent, compared with the national mark of 4.2 percent.
Atlanta office market
The supply and demand forces in Atlanta’s office market reached a “healthy equilibrium” this past second quarter, according to a market analysis by real estate research company JLL. The market continued to strengthen in the third quarter of 2018, with some 2.2 million square feet of speculative office space under construction and another 592,000 square feet of built-to-suit space in the pipeline. The total office vacancy rate as of this past third quarter stood at 18.7 percent — down from nearly 21 percent in 2013.
As a sign of the overall health of Atlanta’s office market, asking rents had increased for 19 of the past 20 quarters as of the end of third-quarter 2018. The overall average asking rent stood at $27.40 per square foot heading into the final quarter of 2018, a historic high, according to JLL. Solid market fundamentals are expected to continue to attract investor and developer interest in Atlanta’s office market in the future, JLL reports.
Georgia ranked No. 3 among the states in terms of attractiveness as an aerospace manufacturing center, according to PwC’s 2018 aerospace manufacturing attractiveness rankings. The state’s aerospace sector has an estimated $64 billion economic impact and boasts some 800 companies that employ some 99,000 people. In addition, aerospace products are the top international export from Georgia, valued at $8.44 billion annually.
Among the powerhouse aerospace employers with significant operations in Georgia are Gulfstream Aerospace, Lockheed Martin, Boeing, Northrop Grumman and Pratt & Whitney. Georgia also is home to business operations for leading satellite-industry employers such as EMS Technologies (part of Honeywell), SpaceWorks Engineering and Masten Space Systems.
Georgia has one of the most diverse workforces in the nation. One in three state residents are African-American, more than double the rate for the U.S. as a whole, and the state is a major magnet for international immigration from Asia, according to a report from U.S. News & World Report. The state posted its seventh straight year of average employment growth in 2017, and many of Georgia’s industry sectors are expected to continue that expansion through 2019, according to the Georgia Department of Labor.
The Peach State’s unemployment rate climbed as high as 10.6 percent during the peak of the last economic downturn, exceeding the national unemployment-rate peak of 10 percent during that period. Georgia’s unemployment rate has since plummeted and stood at 3.6 percent as of this past October, according to the U.S. Bureau of Labor Statistics.
3 Cities to Watch
Founded in 1837 and named for the Western & Atlantic railroad line that terminated in the city, Atlanta is the capital of Georgia and boasts a metro-area population of nearly 6 million people. Atlanta remains a major transportation hub today. It is served by a world-class airport that makes Atlanta easily accessible to the more than 1,000 international businesses that operate in the city. Atlanta was a major battleground during the U.S. Civil Rights movement and is the birthplace of Dr. Martin Luther King Jr. The city also is home to Turner Broadcasting, parent of CNN, as well as the Georgia Institute of Technology, Morehouse College, Spelman College and Emory University.
This historic city with a metro population of some 387,000 people located in southeast Georgia was established in 1733 by Georgia’s founder, James Oglethorpe. It is named after the Savannah River and boasts a rich culture defined by numerous festivals, galleries, museums and theaters. The city’s tourism sector attracts some 14 million visitors annually. Savannah also is known as the Aerospace Corridor of the Southeast, with more than 30 aerospace-related companies located in the area, including corporate-jet maker Gulfstream Aerospace. The city also is home to nearly 270 manufacturing plants employing nearly 17,000 people. The top five in terms of employment are Gulfstream, SNF, Georgia Pacific, International Paper and JCB.
This vibrant college town of some 125,000 residents, named after the ancient Greek city and center of higher learning of the same name, is located some 70 miles northeast of Atlanta. It is home to the University of Georgia, the nation’s first state-chartered college, founded in 1785. Athens’ historic Victorian-era downtown features a plethora of art galleries, trendy retail outlets and eateries as well as a thriving nightclub and music scene, which gave birth to famous rock bands such as REM and the B-52s. In addition to the university, major employers in the area include Caterpillar, which produces construction equipment; Pilgrim’s, a food-products company; and Power Partners Inc., which makes transformers.
What the locals say
“Atlanta’s office market is healthier now than it has probably been since the end of the Great Recession. Right now, we’re at historic highs for rental rates on the office side. When you look at Atlanta, we are one of the four Sun Belt cities that is adding lot of population still. We’ve been adding about 100,000 people a year … so about a million people a decade. That’s what’s driving growth, because that’s driving job creation. And we’re still producing a ton of jobs, and those jobs are demanding additional supply and office space. So, the demand is there.”
Craig Van Pelt
Director of research for the Atlanta region, JLL
Sources: Athens-Clarke County Economic Development, Athens Convention & Visitors Bureau, Atlanta Business Chronicle, City of Atlanta, Cyberstates.org, Forbes, , Georgia Department of Economic Development, Georgia Department of Labor, History.com, JLL, MilitaryBases.com, National Association of Manufacturers, PwC, Savannah Economic Development Authority, The Albany Herald, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, U.S. Census Bureau, U.S. News & World Report, USA Today