Growth in international business helped Atlanta outpace 39 other metropolitan areas to gain the top spot on Forbes magazine’s list of “recession-proof” cities for retirees.
The presence of large, global companies has helped “the financial and industrial center of the South” weather the recession better than other cities, according to Eduardo Martinez, senior economist at rating agency Moody’s Economy.com.
“With companies like Delta and Home Depot, (Atlanta)’s home to more and more international business,” Forbes quoted Mr. Martinez as saying.
Mr. Martinez wasn’t available for comment, but Xu Chang, another Moody’s economist, said Atlanta has become a magnet for international companies because of its location in the Southeast and logistics connections like Hartsfield-Jackson Atlanta International Airport and the Port of Savannah, which is just four hours away by car.
Atlanta is also a quality location for conventions and is experiencing the fastest recovery in the nation in the conference business, Mr. Chang said.
In determining the most economically sound environments for retirees, the Forbes study evaluated seven metrics, including home prices, incomes for the 65-plus population, home-value projections and days of sunshine, among other factors.
Atlanta ranked No. 7 in median home prices and has “housing that is affordable and projected to rise in value over the next five years,” the magazine said. The Georgia capital came in at No. 5 in projected job growth, its highest placement in any category. (See the full chart here.)
Rajeev Dhawan, director of the Economic Forecasting Center at the Robinson College of Business at Georgia State University, briefed on the Forbes report by GlobalAtlanta, said Atlanta’s positive showing on job-growth projections was unexpected.
Nationally, the economy has shown signs that it is gaining steam, but “at the local level we are still losing jobs,” he said. Metro Atlanta’s unemployment rate stands at 10.4 percent, compared to a national rate of 9.8 percent.
“I’m surprised because we are experiencing a very deep recession as far as the employment metric goes,” Dr. Dhawan said. “We are more than 7.5 percent below our peak levels of employment just a few years ago, which is quite a bit more than the national average of about 5 percent.”
Metro Atlanta is home to the fourth-largest concentration of Fortune 500 companies in the U.S. These companies, like NCR Corp., Newell Rubbermaid and others, by nature of their size, tend to have broad international sales. About half of NCR’s revenues, for instance, come from overseas operations, the company has told GlobalAtlanta.
But focusing more abroad could actually hurt the economies where these large companies are based, especially during a recession, Dr. Dhawan said.
“One has to be careful that the international outreach that was a focus in the growing times, can actually become a problem when the times are not good, because you can make domestic cuts rather than international cuts,” he said.
Dr. Dhawan added despite the Forbes rating, Atlanta faces stark competition from other cities in attracting international companies.
“These days the field is pretty open. If you have a good international airport and you’re willing, you can be a competitor very quickly. Atlanta needs to be careful about the developing areas like Nashville and Miami and even Charlotte, which are beginning to nip at their heels,” he said.
Charlotte, N.C., ranked 11th in the Forbes survey. Dallas, Texas, another Southern competitor, was a close second overall but edged out Atlanta in the job-growth and cost-of-living categories.
Gwinnett County has attracted two Fortune 500 companies in the last 14 months, NCR and Asbury Automotive Group.
Companies like this help underpin the local economy by employing thousands of workers, who in turn buy homes and contribute to regional growth, but more importantly, they provide a seal of approval for smaller businesses, said Nick Masino, vice president for economic development at the Gwinnett Chamber of Commerce.
“It gives them confidence that ‘If it was good enough for Home Depot, Delta, NCR, it’s good enough for us,'” Mr. Masino said.
These smaller companies, including the 399 international companies that have regional headquarters or branches in Gwinnett, contribute to the diversified industrial base that makes Atlanta so resilient even in a downturn, Mr. Masino added.
“When one or two industries fail, it doesn’t cripple us,” he said, contrasting Atlanta with Detroit, the epicenter of the ailing U.S. auto industry, which ranked last on the Forbes chart in job-growth projections for 2009-14.
John Woodward, director of foreign investment at the Metro Atlanta Chamber, agreed.
“We have a pie chart of the different sectors of the economy in Atlanta. There’s no one sector that takes up even 25 percent on that pie chart,” he told GlobalAtlanta.
International economic development augments that diversity, which provides “stability, just like diversifying one’s stock portfolio,” Mr. Woodward said.
Mr. Woodward said he’s encouraged by the fact that Atlanta topped this Forbes list but said that a better assessment of the city’s strength is to take the sum of such rankings.
This one focuses on retirees, but Atlanta has also been named the top city for singles and entrepreneurs.
The aggregate picture is “really the greater story and speaks of the fundamentals of the Atlanta economy,” he said.
Mr. Woodward said that inquiries for foreign direct investment in the city have picked back up after “spiraling downward” at the beginning of the recession.
“Our project pipeline now is larger at this point than it was at this time last year,” he said, noting that companies are still cautious about making relocation decisions.