Georgia’s economy is set to slow in 2025, though experts believe the state may fare better than the rest of the nation. University of Georgia economists presented their forecasts at a recent economic outlook event, signaling some turbulence ahead—but with a few silver linings.
Economic Growth Slows, But Georgia Outperforms
According to UGA economists, Georgia’s economy is projected to grow by 2.4% in 2025, down from 3.1% in 2024. While this slowdown may seem concerning, it’s important to note that Georgia is expected to outpace national growth. Nationwide, the economy is forecast to grow at just 1.6%, a stark contrast to the 2.5% growth anticipated in 2024.
Ben Ayers, the Dean of the Terry College of Business at UGA, emphasized that Georgia’s economy is expected to face a smaller downturn compared to the national average. He shared his optimism with an audience of business leaders in Atlanta: “The slowdown we’re expecting will be smaller here in Georgia.”
This cautious outlook for the state’s economy comes on the heels of the Federal Reserve’s actions to control inflation by tightening lending. While inflation has dropped from 8% to 3% since 2022, the expected inflation rate for 2025 is projected to remain steady at 3%, reflecting the ongoing impact of those measures.
Key Risks and Potential Pitfalls
Despite this relatively stable outlook, Ayers warned that Georgia’s economy still faces risks. The probability of a recession in 2025 stands at one in four, a bit higher than the one in six risk earlier predicted for this year. Various factors could lead to this downturn, including a potential energy price shock, a stock market crash, or geopolitical instability, particularly the ongoing conflicts in Ukraine and the Middle East.
Ayers also noted that Georgia’s unemployment rate is expected to rise slightly, from 3.7% in 2024 to 4% in 2025. However, this figure remains better than the national average, which is expected to hit 4.3%. The job market in Georgia is still projected to see new hires, though the growth in jobs is expected to slow. The state will see a 1% increase in job growth, down from 1.5% in 2024—again, outperforming the national growth rate of 0.6%.
Sectors to Watch in 2025: Health Care and Home Building
Despite the expected slowdown, certain sectors in Georgia are expected to experience growth. With the state’s population continuing to grow and age, health care jobs are expected to see a boost. Health care, in particular, is predicted to be one of the more resilient sectors, offering more opportunities for job seekers.
Meanwhile, the housing market, while facing challenges, is expected to remain a key driver for employment. The state’s housing shortage, combined with favorable demographic trends and lower mortgage rates, should support continued job growth in home construction. The number of single-family homes is projected to increase by 9%, which will create jobs for builders, even as home prices remain high.
However, the news for homebuyers isn’t as bright. Home prices, which have surged by 65% since the pandemic, are expected to hold steady in 2025. For those hoping to enter the housing market, it looks like they may need to keep waiting for more favorable conditions.
Georgia Job Outlook:
- Health care and home building are likely to see job growth.
- Retail and information sectors may face more competition due to technological advances and online retail.
The Trump Factor: A Wild Card for Georgia’s Economy
As the economy heads into 2025, the financial policies of President-elect Donald Trump could add another layer of uncertainty. Trump’s economic agenda has included proposals such as tariffs on imported goods, which could raise the cost of everyday products. Economists like John Silvia, a Florida-based economic strategist, warned that these tariffs could increase inflation in the short term, ultimately leading to higher prices for consumers.
Silvia pointed out that while the immediate impact of tariffs might be more inflation, the longer-term effects could be even more problematic. “In the long run, prices stay higher than what they were originally. This presents a problem,” he explained.
Silvia also discussed the potential impact of Trump’s proposed immigration policies, particularly regarding the deportation of millions of undocumented workers. This could have significant consequences for industries like agriculture and construction, where immigrant workers play a crucial role. Silvia noted, “We’re not gonna get the job done if you’re gonna tell me all these immigrants have to leave. It’s not gonna happen.”
The direction of these policies over the next year will likely shape Georgia’s agricultural and construction output for years to come, with the potential to either fuel or hinder job growth in these sectors.
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