Georgia’s Foreign Firms Increased Hirings in Hopes of Positive 2014

The 2013 fourth-quarter slump in the performance of Georgia‘s foreign-owned businesses doesn’t overly concern Donald Sabbarese because of the slight rise in their employment figures.

Dr. Sabbarese, professor of economics and director of the Econometric Center at Kennesaw State University, told Global Atlanta that the positive employment uptick must reflect his respondents’ confidence about new orders and the prospects for production.

The center’s Georgia International Business Index (GIBI), which is published quarterly by the Michael J. Coles College of Business at Kennesaw State, reported that new orders were down in the fourth quarter by 32.4 points to 46.2 and production was down 21.2 points to 53.8.

In contrast, the employment figures were up 4.9 points to 69.2.

The index also tracks capital spending, which was down; exports as a percent of total sales, which also was down slightly and imports as a percent of total sales, which was up.

Collectively, the fourth-quarter GIBI dropped by 14.8 points from 70.5 in the third quarter to 55.8. A GIBI reading above 50 indicates that manufacturing activity is expanding while a reading below 50 indicates it is contracting.

Kennesaw’s quarterly GIBI compiled by a survey of roughly 100 respondents is the only indicator of market conditions for foreign-owned manufacturers in the state.

Dr. Sabbarese also said that he considered the GIBI’s jump in the third quarter to 70.5 was an “aberration,” and that the fourth quarter figures were more in keeping with last year’s first two quarters.

His Purchasing Managers Index in December for the state’s domestic manufacturers rose 1.6 points to 53.9, revealing some optimism about the prospects for the first quarter of 2014.

In his domestic report, Dr. Sabbarese indicated that growth in the housing and automobile sectors would be key for this year’s economic prospects, but that there were also many “wild cards” affecting the state’s economy. He added that the results for the domestic and foreign-owned manufacturers would not necessarily be in tandem.

Manufacturing accounts for 9 percent of Georgia’s total employment. The Georgia Department of Labor indicates that the state has a total of approximately 3.8 million employees.

Dr. Sabbarese may be reached by calling 770-423-6094 or by sending an email to dsabbare@kennesaw.edu