Atlanta is seeing signs of an economic upswing. Despite employment level fluctuations throughout 2011, data reveals that employment levels rose as 30,300 jobs were added. Though well above the historical average, unemployment shares dropped to 9.4% in December 2011 from a high of 10.5% in June 2011 and 10.1% in December 2010. Atlanta is positioned as a major destination for commerce. Professional and business services, Atlanta’s largest sector, have shown greater than national average growth, adding 16,500 jobs last year. Trade, transportation and utilities sector also added 10,000 jobs last year. Increased activity at Georgia’s ports and passenger traffic at Hartsfield-Jackson International Airport due to a $1.2 billion expansion which added 12 international gates to total 40 has fueled transportation and logistics job growth. Though the market is diverse and made improvements in 2011, the area suffers from reserved employer hiring, a weakened real estate market, and a higher than average unemployment rate. Atlanta experienced major growth from 2000 to 2007 as the fastest growing US metro with 33% of its new residents immigrating from abroad. While uncertainty exists at the local and national level, projections estimate Atlanta will continue to see job growth in 2012 with forecasts pointing to approximately 31,500 added jobs. Gross Metro Growth (GMP) is projected to be 3.8% in 2012 compared to 1.9% in 2011.
Retail remains stagnant while vacancy remains unchanged. Inventory levels have shown little fluctuation since 2009. Data shows that negative absorption is leveling off and projections indicate positive absorption into 2012. Despite negative absorption in the second and third quarters 2011, the year ended with a strong positive finish and increased completions. Low absorption has caused vacancy rates to remain stagnant, finishing just over 14% in the fourth quarter. Projections estimate modest decreases in vacancy rates of 50 bps in the upcoming year and beyond as absorptions and completions increase. Effective rents decreased marginally as vacancies rose post-recession but absorption increases will drive effective rents back up for 2012 and beyond.