A new economic forecast from the University of Georgia’s Selig Center for Economic Growth suggests that Georgia’s economy is facing significant challenges due to national-level policy decisions, particularly those involving trade and immigration. The 43rd annual outlook estimates a 49% chance of the state entering a recession, describing the situation as nearly a toss-up.
According to the report, national economic headwinds—primarily driven by President Donald Trump’s aggressive tariff policies—are suppressing growth in Georgia. Instead of achieving an estimated potential growth rate of 2%, the state is projected to grow at just 1.3%. Job creation is expected to remain sluggish, with only about 0.5% growth anticipated in the coming year.
Jeffrey M. Humphreys, director of the Selig Center and lead author of the study, attributed the slowdown mainly to the ongoing trade war and tighter immigration rules. He noted that uncertainty in both economic and political spheres has led businesses to delay or cancel investment projects.
Georgia’s reliance on international commerce makes it more vulnerable than the average U.S. state to disruptions caused by tariffs. While Atlanta’s diversified economy insulates it somewhat from global trade fluctuations, smaller industrial communities are feeling the strain. Coastal cities like Brunswick and Savannah, which depend heavily on port activity, are particularly affected. Similarly, manufacturing hubs in North Georgia—including Dalton, known for flooring, and Gainesville, a center for food and machinery production—are seeing reduced export momentum.
Despite these pressures, the labor market remains stable, with unemployment holding steady at 3.4% in September, matching the previous month and remaining below the national average. However, job mobility has declined, shifting bargaining power toward employers. Workers are no longer easily switching roles to secure higher pay, signaling a cooling job market.
Consumers continue to support economic activity. State tax revenues rose 0.9% in November compared to the same month last year. Although income tax collections dipped, this was offset by stronger sales tax receipts, including a 53% surge—amounting to $70 million—in motor fuel tax revenue.
Household financial conditions remain relatively healthy, aided by sustained home values due to a persistent housing shortage. Most homeowners are not underwater on their mortgages, unlike during the 2008 crisis. Many also benefited from locking in low interest rates years ago, though rising property taxes and insurance costs are eroding purchasing power.
For those unable to buy homes earlier, prospects remain bleak. Housing affordability is expected to worsen in 2026 due to multiple factors: limited construction labor caused by immigration restrictions, higher material costs from tariffs, and fewer homeowners selling due to tight market conditions.
“Since we do not expect these negative factors to change very much in 2026,” the report states, “the homebuilding and real estate sectors will remain in recession.”
— news from thecurrentga.org
— News Original —
National economic headwinds blow through Georgia, though job outlook steady for now
ATLANTA — National economic headwinds driven in part by politics will continue suppressing Georgia’s economy while raising the risk of recession, says a new economic forecast from a business think tank at the University of Georgia. n nThe 43rd annual prediction by the Selig Center for Economic Growth rates the risk of a recession in Georgia at pretty much a coin toss. n n“In short, Georgia’s economy will struggle, and it would not take much to tip into recession,” says the report, out this week. n nIt places the odds of a recession in Georgia at 49%. n nThe forces on the state economy are largely the result of policies in Washington, as President Donald Trump’s tariff war blunts national economic growth, which the report placed at 1.3% rather than the potential 2%. Job growth will likely remain subpar, its authors predicted. n n“We’re expecting another year of slow economic growth. The rate of growth will be very similar in 2026 to what we experienced in 2025, but there is a higher risk of recession,” Jeffrey M. Humphreys, the main author, said in an interview. n nGiven the uncertainty in the economic and political environment, fewer projects are in the pipeline, said Humphreys, the director of the Selig Center. “The biggest headwind is of course the trade war. And then the second biggest headwind is more restrictive immigration policies.” n nGeorgia depends more on international trade than the average state, so the tariff troubles have been taking a greater toll here. n nAtlanta, with a highly diverse economy, depends less on global trade than other large metro areas, so is less exposed. n nBut smaller communities with economies based more on production and international trade are feeling that ill wind. n nThe economies of coastal Brunswick and Savannah, for instance, rely heavily on shipping through their major ports. And North Georgia industrial communities — Dalton with flooring and Gainesville with food and machinery production — are also affected, as they move product through those ports to international consumers. n nThe job market has been stable, if lackluster. n nThe unemployment rate remained at 3.4% in September, the same as in August, according to the Georgia Department of Labor. That was a percentage point below the national average, though it meant more than 180,000 without jobs. n nThe job market has been cooling through the year though. n nPreviously, employees could hop between jobs to boost their wages. n nNow, employers have the upper hand, Humphreys said. And that should last into next year. n n“The labor market has barely been adding any jobs at all,” he said. “We’re only expecting about a half a percent job growth next year, so basically the labor market has stalled out.” n nEven so, consumers have been propping up the economy. n nNovember tax revenues were up 0.9% last month compared to November a year ago, according to the Georgia Department of Revenue. n nIncome tax collections fell but were counterbalanced by rising sales tax revenue, with motor fuel tax receipts up a whopping 53%, or $70 million. n nDespite the uncertain economic outlook, people who have jobs feel secure in them, the Selig Center report said. n nHousehold finances are generally in good shape with manageable debt, due in part to a housing shortage that has buttressed home values. Houses are pretty much worth the mortgage note, so home loans are not at risk of sinking underwater like in 2008. n nAnd many were lucky enough to lock in historically low mortgage rates a few years ago, though rising property tax and insurance rates have been nibbling away at buying power. n nFor those with less fortunate timing who did not find an affordable home, the report did not offer good news. n nHousing costs are expected to remain out of reach next year due to a variety of factors behind an abiding shortage. The tight labor market means fewer homeowners are moving and selling. Tariffs have driven up costs for construction materials. And the Trump administration’s policies on immigration have pinched the construction industry’s labor supply. n n“Since we do not expect these negative factors to change very much in 2026,” the Selig Center said, “the homebuilding and real estate industries will remain in recession.” n nThis story is available through a news partnership with Capitol Beat, an initiative of the Georgia Press Educational Foundation.