According to the Augusta Economic Development Authority (AEDA), Augusta’s population grew by more than 25,000 people over the last five years and is projected to grow by another 26,000 by 2028. In that same time, jobs rose by 3,700 and are projected to increase by almost 12,000 over the next five years. As Augusta’s population and jobs continue growing, the city has become a prime location for businesses and plays a key role in the area’s economic strength. To continue this upward trajectory, local businesses need to understand and effectively navigate the ongoing impacts and challenges of inflation.
Increased wage demands
The implications of inflation and increased wage demands are significant, particularly for businesses striving to maintain profitability while meeting the rising expectations of employees. As inflation drives up the cost of raw materials, energy, and labor, businesses face escalating production costs, which in turn leads to pressure to raise wages to retain skilled workers and remain competitive in the labor market. While these wage increases may help attract and retain talent, they often result in higher overall operational costs. To compensate, companies may raise the prices of their products or services, passing on the increased costs to consumers. However, this price hike can reduce consumer demand, especially for non-essential or discretionary items, leading to slower sales and potential profit margin compression.
Businesses in highly competitive or low-margin industries are particularly vulnerable to this cycle. Smaller and local businesses, in particular, may struggle to absorb these rising costs without resorting to layoffs, reduced hours, or cost-cutting measures, which could further harm their customer service or product quality. The Augusta environment has become increasingly challenging as businesses navigate this complex landscape of rising wages, inflation, and shifting consumer behaviors. For these reasons, it is important that businesses—in Augusta and beyond—adapt their 2025 strategies to account for these realities.
Tighter labor market
Right now, we’re also seeing the impact of inflation in a tight labor market – resulting in significant pressure on businesses and workers. Many Augusta businesses are recognizing the importance of improving compensation and offering greater flexibility in work arrangements as crucial for attracting and retaining talent. Addressing workforce shortages demands a strategic approach. To meet this challenge, businesses are proactively implementing tactics such as offering competitive pay and benefits, investing in employee development, and using technology and automation to optimize operations.
The outlook for Augusta amid current economic and business trends appears cautiously optimistic but not without challenges. While the region continues to benefit from its strategic location, growing infrastructure, and favorable business climate, the impacts of inflation and a tightening labor market could create headwinds for businesses and workers alike. Augusta’s diverse economy, with strengths in healthcare, manufacturing, and technology, offers resilience and opportunities for growth. If businesses can adapt to these economic shifts by investing in innovation, streamlining operations, and leveraging the city’s growing workforce, Augusta may continue to thrive as an attractive location for investment and employment.
Helen Caldwell is Senior Vice President, Commercial Banker at Synovus Bank. Helen has nearly 20 years of experience in treasury management and commercial banking.
