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Cobb Energy Centre Hosts Luncheon with Former CNBC Chief Economist

As the economy continues to get untracked in 2012, the metro Atlanta region finds itself at something of a crossroads, former CNBC chief economist Marci Rossell told those attending the Commercial Real Estate Women of Atlanta’s January luncheon, held Thursday at the Cobb Energy Performing Arts Centre.

The region has been shielded from the impact of past recessions because of robust population growth, Rossell noted. However, the metro area’s population has increased by just 1 percent over the past three years, meaning the region has struggled to shake off the effects of the downturn that began four years ago.

Atlanta officials now face a sobering question, according to Rossell: “Do we become Charlotte or do we become Detroit?” The former, she explained, responded to the decline of its textile-manufacturing sector in the early 1990s by making itself an appealing location for the finance sector, while the latter has continued to pin its hopes on the automobile industry.

The recent streamlining of its building permit process, which officials hope will make the city a desired destination for business expansions and relocations, indicates Atlanta is willing to make the changes needed to grow its economy, she said. 

Rossell’s analysis of Atlanta was just one component of an hour-long talk that also touched on the broader U.S. economy and the commercial real estate sector. 2012 will be marked by continued improvement in unemployment numbers, Rossell predicted. “This time next year – you can hold me to this – we’ll be at 7.5 percent unemployment,” she said.

She also downplayed the risks posed by the economic troubles of Europe, saying the U.S financial sector has prepared for the potential breakup of the euro zone. What would create a real setback is an unexpected event, such as last year’s earthquake in Japan or the debt-ceiling crisis, she argued. “What bumps you away from the [recovery] cycle? The unexpected things,” Rossell said. “Is there anybody here that hasn’t heard that Greece is in trouble?”

The commercial real estate sector has experienced improved transaction volume and financing conditions during the past two years, but pricing has yet to climb; however, pricing is always “the last phase of a [recovery] cycle,” she said.

Meanwhile, residential home prices may not rebound to their pre-recession, 2006 levels until 2016, Rossell indicated. “It takes 10 years for [residential] real estate to reach its previous peak,” she said.

Founded in 1982, CREW Atlanta’s mission is to elevate women to positions of power and influence in commercial real estate by providing resources and business opportunities. CREW Atlanta is a member of a national CREW Network. Lucky for us, our neighbor Cobb Energy Centre hosts a number of CREW’s events, including its upcoming 30^th Anniversary Gala on April 26.

To learn more about CREW Atlanta, check out its website.

More information about events at Cobb Energy Performing Arts Centre can be found at www.cobbenergycentre.com.

Cobb economy in 2012 will look awfully familiar, local economist says

When it comes to the Cobb County and metro Atlanta economies, next year is poised to look a lot like this year. That’s the forecast of Don Sabbarese, an economist who teaches at Kennesaw State University and is the director of the school’s Econometric Center. 

“What we saw in 2011 is what we’ll see in 2012: slow growth,” he said.

According to the most recent statistics available on the Georgia Department of Labor’s website, Cobb County had an unemployment rate of 9.1 percent in October 2011. The county’s rate declined from 9.4 percent in September and 9.6 percent in October 2010.

Cobb is performing better than some other jurisdictions in the state. For example, the unemployment rate for the 10-county area served by the Atlanta Regional Commission - which includes Cobb – had a 9.8 percent unemployment rate. The rates for the state of Georgia and the United States were 10.2 percent and 9 percent, respectively.

Cobb County and the metro Atlanta area have experienced some job growth recently in the education and health service sectors, as well as the manufacturing, professional business services and hospitality segments, Sabbarese noted. In fact, the Georgia Purchasing Managers Index (PMI), a measure of the state’s manufacturing activity that is calculated by the Econometric Center, reached 52.4 percent in November, its first increase in three months. A number above 50 indicates that manufacturing activity is increasing, while a number below 50 indicates it is decreasing.

It’s All About Real Estate

Sabbarese notes that the construction sector continues to lack job growth and says that until the real estate market improves and construction starts pick back up, the economies in Cobb and the rest of Georgia won’t return to their pre-recession job levels.

And while the job loss in the government sector may slow, local governments will continue to be burdened by the housing crisis, as depressed housing prices will keep tax revenues down.

The “construction and financial [sectors] are going to struggle,” he said. “It’s going to take a long time to improve.”