Kenneth Shiver, chief economist with Southern Company, shared a few of his thoughts on the economy this week, including the growing population, rumors of recession and changes to retail businesses.
Shiver was the keynote speaker at the 2019 Economic Outlook Breakfast hosted by the Cumming-Forsyth County Chamber of Commerce and shared his thoughts on a broad range of topics, including answering questions from the crowd.
He said while there are economic concerns, such as growth in the county, overall there are “no major imbalances.”
“Here in Forsyth County, you start looking at things it’s, ‘Hey, I’ve got a lot of population growth up here, how do I manage the growth? With the leaders here in the county and the plans in place, it seems like it’s on the right track of managing the growth well, moving it forward,” Shiver said. “That is the challenge, and so far y’all have been greatly up to the challenge.”
Population and labor force
Growth is one of the biggest and most often brought up issues in Forsyth County, and Shiver said there are several population factors that can potentially impact the economy.
“Here’s another fascinating statistic: there are more jobs out there than there are people who are unemployed,” Shiver said. “That’s great if you’ve got a job. The question is, how do we grow from here, now?”
Shiver said 51 percent of employees in Forsyth County commuted to DeKalb and Fulton counties to work, about 48,000 people. About 25,000 commute into the county each day to work in county jobs.
The ongoing opioid crisis, Shiver said, is also having an impact on those who can be hired.
“I talked about this with manufacturers last week,” Shiver said. “Literally, if I need 50 workers, I have to bring in 100 workers to make sure I’ve got 50 that can pass the drug test. That is a major drag on our economy.”
Another factor is the changing demographics as baby boomers retire and millennials continue to enter the workforce.
Though some economists are forecasting an incoming recession, Shiver said he sees “slowing in the rates of growth.”
“There is no such thing as ‘being time to have a recession,” Shiver said.
Shiver said recessions “are always about removing imbalances,” which he did not largely see in the economy but did say the rate of growth might slow.
“It’s not time for a recession but it is probably time for a little bit less uplift in the economy with just a little more moderate growth, especially for 2019,” he said.
With talks of trade wars and tariffs becoming more common, Shiver said many businesses, particularly manufacturing, are keeping an eye on changes to NAFTA and any possible trade war.
Shiver said his position was free trade was good “when both sides have open markets.”
“We start talking about the case of China, we start getting the question, ‘Are their markets just as open as our markets?’” he said. “That’s where we look at the numbers and look at the intellectual property issues going on in China. It’s time to do something about China, the question is how do you do something about China?”
He said it looked like the U.S. and China could come to a resolution but there was some uncertainty.
Shiver said NAFTA had a larger impact on the southeast due to manufacturing.
Forsyth County has seen local business try to adapt to the growth of online sales.
Shiver said at his address last year, he implored listeners to shop at local businesses instead of online.
“I told y’all to stop, but I didn’t stop either,” he said. “We’re all shopping at Amazon or other online stores. What’s interesting is the online is hitting us a couple of different ways. We don’t need as much square footage as we did before in the economy for the same amount of populations.”
While online shopping is growing, Shiver said traditional retail had “one of the best years ever” in 2018.