Economist calls economy "uninspired" - WALB.com, Albany News, Weather, Sports

Economist calls economy "uninspired"

January 27, 2005

Albany-- One of Georgia's top economists says the economy is "uninspired." Interest rates are rising, consumers are finding themselves swamped in debt, and some of the state's largest employers are hurting.

We've heard the economy has been lagging for about four years. And experts say get ready for a fifth.

So, what will that mean for your finances, job, and business?

The Kennel Club Owner Billy Hodges hopes pampering pets will make him a success. "Anyone that's not nervous going into a new business is a fool." Hodges opened The Kennel Club, a full-service pet salon, last week.

"It's definitely a big investment." And a big risk. "You never know what's going to come or go or how the economy is going to be."

A bad economy could mean a quick wash-out for a luxury service like pet grooming.

But UGA economist George Benson has some good news. "We see small and medium sized businesses beginning to move. There's been an increase in demand for products and service in the last two or three years. So it's a good time to be starting a business."

But Benson told area business leaders that 2005 won't be good for the economy as a whole. "This will be the fifth year in a row of below average growth in Georgia."

The state's economy is only expected to grow about 3% in 2005. But economists expect 60,000 new jobs statewide because companies are making slightly more profit and can afford to hire more employees. "We expect them to hire aggressively this year to pump up the economy, but it still won't be strong enough to get us to above average."

What is above average is consumer debt. "We don't save very much, and we borrow."

Consumer spending remained high despite the lagging economy, mainly because people resorted to credit and loans. But now that interest rate are rising upping those credit card bills, "We expect consumer spending to slow a little this year."

Not the best news for Hodges, who's literally banking on pet lovers to spend big to help his new business get off the ground.

Dean Benson summed up the economic outlook by saying the economy won't be surging, "but it will be making progress, slow progress."

Some of the state's largest companies, like Delta and Coca-Cola, are still doing poorly, which has a huge effect on Georgia's economic growth.

posted at 4:20PM by dave.miller@walb.com