published Monday, March 14th, 2011

Looking up

SAVANNAH, Ga.—Hotels are hiring new desk clerks and housekeepers in anticipation of a spring tourist boom in Savannah, while even a rural Georgia city devastated by manufacturing losses is putting people back to work as construction begins on a $57 million private prison.

Yes, Georgia still lags behind most of the U.S. with a 10.4 percent unemployment rate and barely a trickle of new hiring to make up for 350,000 jobs lost since 2007. But economists said they see the state’s economy slowly pulling itself from the grip of recession and predict more progress will be evident by the year’s end.

“The overall trend, if you look, clearly shows an economy that is recovering,” said Jeffrey Humphreys, economic forecaster at the University of Georgia. ”By the end of the year, I think Georgia will be performing on par with the rest of the nation.”

What looks promising? Last week the state Department of Revenue reported that February tax collections rose 26 percent compared with the same month a year ago. Sales taxes were up, a sign that Georgians are spending more.

Corporate income tax collections also increased, signaling that businesses are making more money. And it was the eighth straight month that state revenues increased, signaling the good news is not likely a fluke.

King Rocker, the mayor of tiny Millen, is seeing sales perk up for the first time in three years at his building supplies store in Jenkins County. Business had withered by about 65 percent, he said, until Corrections Corporation of America broke ground around Thanksgiving on a prison designed to hold 1,150 inmates — the company’s sixth private prison in Georgia.

Jenkins County had Georgia’s worst unemployment rate early in the recession, and in January it still ranked second-highest with a rate of 19.2 percent. Paula Herrington, director of the local Chamber of Commerce, said it could be another decade before the county’s economy recovers completely.

“It’s doom and gloom, but it’s going to turn around,” Herrington said. ”It’s just going to take a while because we were so down.”

Savannah has fared better than most Georgia cities during the recession, thanks to having the nation’s fourth-busiest container port and a hefty population of military personnel from Hunter Army Airfield and the U.S. Coast Guard. Now the coastal city’s other big industry — tourism — is roaring back after a profitable 2010.

Savannah raked in $11.6 million in hotel taxes last year, topping the coastal city’s previous best year ever in 2007, said Joe Marinelli, president of the Savannah Convention and Visitors Bureau. Hotel operators say they’re gearing up for a busy spring tourist season based on what they saw in 2010.

At the Planters Inn in downtown Savannah, general manager Marc Friday has made several new hires — two desk clerks, two housekeepers and an extra breakfast attendant. That’s a big addition considering his 60-room inn has only 32 employees.

“We’re expecting big things,” Friday said. “More people are making their reservations, and all the indications are that it’ll be a great year. And last year was phenomenal.”

Still, Georgia’s economy remains a long way from a full recovery. January marked the 40th consecutive month the state’s unemployment rate has exceeded the national average, which was 9 percent.

Georgia Labor Commissioner Mark Butler said it’s not surprising for unemployment to lag behind other signs of economic turnaround. That’s because businesses often start ramping up production by having employees work overtime. They don’t start hiring new workers until they absolutely have to.

Also, unemployment can jump as the economy starts to improve because laid-off workers who had stopped looking for new jobs start searching again, said Kenneth Heaghney, Georgia’s state fiscal economist. Unemployment rates count only the jobless who are actively seeking work.

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