The state of Metro Augusta’s economy is good. That was the overarching message at the annual economic briefing sponsored by Augusta University.
Led by Dr. Mark Thompson, Dean of the Hull College of Business, and Dr. Simon Medcalfe, Professor with the Hull College of Business and an ABD contributor, the report is a year-end tradition.
“It’s an opportunity to really bring the business community together with the academic community to provide insights on what’s going on in the local economy,” Thompson explained for ABD. “It’s networking but it’s also an opportunity to share the work that we do.”
This year’s event also marked the first economic data since Hurricane Helene cut through the area.
“It’s hard to say it had a positive impact, but it had a positive impact, at least on the labor market,” Medcalfe told ABD. “We’ve only got one data point right now, but employment was up in October, so cautiously optimistic, given all the devastation that we’ve had in the physical construction and physical capital, that potentially we have the opportunity to build back better.”
Medcalfe said the Metropolitan Statical Area (MSA), made up of Richmond, Columbia, Burke, and McDuffie counties in Georgia and Aiken and Edgefield Counties in South Carolina, saw record employment numbers.
“October numbers, 238,000 employed in the local area. Highest number we’ve had employed since records began back in the late 90’s. Even the hurricane couldn’t interrupt our employment growth, the last six months of uninterrupted employment growth in the local area,” said Medcalfe.
One area that showed a positive impact because of the hurricane was lodgings and hospitality, as out-of-town workers arrived to help with cleanup and repairs.
“Hotels did really well. We saw people from out of town. They had to stay somewhere. They stayed in our hotels. Compared to October last year, occupancy was up to 81% in October. Revenue is up 22% with $111 per room overall. Revenue up 74%,” Medcalfe said.
Results were not as encouraging for the service sector, including retail and transportation. Lack of electricity and water forced many to close for as much as a week. Debris blocked roads and halted transportation of goods to and from the area.
Not all of the report was positive, particularly for the future, affecting local government.
“In the first one to five years, we’re going to benefit from intergovernmental transfers,” he said. “There’s some state aid coming in to help us with cleanup. There’s some FEMA aid coming in to help us with cleanup. After about six years, that’s going to disappear. In terms of revenues for the local government, looking now six or 10 years later on, we’re going to see some negative impacts of this. We’re going to see declines in expenditures on public works, it’s going to become harder for counties and metro areas that are impacted by the hurricane to raise debt in order to finance their expenditures.”
There could also be an uptick in the mortality rate. Factors include people using savings and retirement funds for repairs leaving less to pay for healthcare, disruptions in availability of healthcare, people losing their support network when family and friends relocate, and the stress associated with those factors.
Medcalfe also touched on elements that could impact the local, and national economy, in the coming year. That includes policies enacted by the incoming Trump administration, whether the 2017 tax changes will be extended, and potential tariffs on incoming goods and supplies. He said broaching those topics can help businesses plan for the future.
“Going into the new year, the new administration and what policies they’ve mentioned they will implement and when, we’re just trying to provide some extra data points, concentrating very much on the local economy, on the Augusta economy, so that businesses can plan better for the new year,” said Medcalfe.
Thompson said that is why it is important to hold this annual economic outlook meeting each year.
“That’s why we bring all different groups together to have those conversations, to be able to plan and try to provide more certainty to what’s forthcoming,” he said. “This is the baseline of where we are in Augusta, where we are in the state of Georgia, and where we are in the US.”
