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Experts say 2011 will bring economic growth
State and nation to grow at the same rate
Employees work inside manufacturer ZF Industries in Gainesville. Manufacturing is projected to grow in 2011, according to a statewide economic forecast presented Dec. 15 by the University of Georgia Selig Center of Economic Growth.

Predictions for 11 industry sectors in 2011

Large increase: Manufacturing, services, life sciences

Moderate increase: Transportation, public utilities, information, retail trade

Flat: Hospitality

Moderate decrease: Financial markets, government

Large decrease: Construction

University of Georgia Selig Center for Economic Growth


Georgia's economy will see an uptick in 2011, and Hall County should keep pace, local officials are saying this week.

As the year closes, economists across the state are trying to make predictions, and Greater Hall Chamber of Commerce officials plan to reveal their own details later this week.

"We have information about our 2010 economic development activity. A lot of hiring from companies who have expanded will take place in 2011," said Tim Evans, the chamber's vice president for economic development. "I think we'll see a number of companies will do the bulk of their hiring in the new year."

For the most part, chamber workers are feeling upbeat about potential development in the new year.

"I think we'll be off to a good start because of what we worked on in 2010," Evans said.

Overall, Georgia will see growth in manufacturing, life sciences and transportation, according to a statewide economic forecast presented Dec. 15 by the University of Georgia Selig Center of Economic Growth. Hospitality will remain flat while construction, financial markets and government will continue shrinking, according to Terry College of Business Dean Robert Sumichrast.

Though the gross state product expanded by 1 percent over 2010 and lagged behind the rest of the country, it should grow 2.3 percent next year, he added.

In 2011, the state's economy will grow at the same rate as the national level, which will be the first time in seven years the state has kept pace, he said, and in 2012, the state should surge ahead.

"As the lingering effects of recent restructuring and the real estate bubble fade, Georgia will begin to outperform the U.S. in 2012," Sumichrast told about 800 executives when he revealed the report.

To help the state get back on its feet, employers and investors should avoid being too cautious, Sumichrast noted.

"People and businesses are exhibiting an unusual degree of risk avoidance for a recovery that is about 1 1/2 years old," he said. "This is the time to take on some calculated risk if you want to benefit fully from the economic recovery and the expansion that will follow."

Major corporations are sitting on large cash reserves, and consumers are saving more when interest rates are at a historical low.

"If my forecast for sustained economic recovery is correct, then too many people are playing it way too safe," Sumichrast said. "Banks are beginning to lend again. The best loans are often made during economic recoveries. And if you are a business leader, then consider investing some of your cash to raise output."

Future growth likely will shift from the public to private sector, he said.

"We're almost through with government stimulus and inventory building." Sumichrast said. "Going forward, GDP growth will be based primarily on consumer demand, both foreign and domestic. Now that the baton has been passed to the private sector, the economy is no longer on life support. The recovery has become self-sustaining. But due to weak job growth, it's almost certain to continue very slowly."

Nationally, economic growth will slip from 2.7 in 2010 to 2.2 percent in 2011, mostly due to dissipating federal stimulus dollars. Consumer demand will have to spur ongoing recovery, he said.

"Many of the major imbalances that led to the Great Recession have been corrected," Sumichrast said.

"Analysis by our Selig Center indicates that the housing market has fully corrected, nonresidential real estate has largely corrected and the trade deficit has partially corrected. In addition, household balance sheets have improved."