Mike Klein Online

Global Trade Will Provide Georgia’s Best Growth Potential

This article was written for and published by the Georgia Public Policy Foundation.

Global trade has begun a steady recovery from worldwide recession that could last for several years, far outpacing anticipated U.S. annual GDP growth and providing an opportunity for Georgia to capitalize on the import – export economy.  “We’re in recovery,” says Paul Bingham, director of IHS-Global Insight, a global analytics firm that tracks worldwide economic trends.

Bingham addressed more than 800 guests at the 2010 Georgia Logistics Summit on Thursday (April 29) at the Cobb Galleria north of Atlanta.   IHS-Global Insight predicts U.S. economy 3.0% real GDP growth this year and through 2012.  Global trade is predicted to rebound 11.9% this year, and more than 7% each of the next two years.   Trade with Asia leads the recovery and should for the next several years.

Bingham identified autos, metals, chemicals and commodities as global trade recovery leaders.  Many products associated with those categories move through Georgia’s Savannah and Brunswick ports, and then out onto its highways and rail lines.  Bingham said global trade would return to pre-recession levels within the year and continue to grow pending other international events that reverse positive trends.

The conference set the stage for internet release of the 2010 Georgia Logistics Report: Fueling Georgia’s Logistics Competitiveness.  The report provides extensive detail about the five primary factors that generate logistics success:  policy, infrastructure, operations, technology and workforce.

Most conference attendees were from within the private sector and for many, it was the first time they had heard the state’s new transportation funding model discussed in detail.

Todd Long, state DOT Director of Planning, warned Georgia is “at the top of a downward spiral” in terms of being able to develop and maintain highway infrastructure.  Long made that point emphatically with a slide that said, ‘’AT CURRENT INVESTMENT TRANSPORTATION LEVELS:  GEORGIA’S OUTLOOK IS GRIM”.  Georgia spends less per capita on transportation than every state except Tennessee.

Georgia receives high grades for the quality of its major highways, but the state has insufficient east-to-west and north-to-south major highways for freight purposes.    Atlanta is congested to a great degree because freight has no option other than driving through the metro region.   Trucks carry 85% of all Georgia land-based freight and Long said the goal is to move more freight by rail.

Georgia relies on motor fuel sales taxes to fund highway improvements.  The three-year recession means fewer miles are being driven, less fuel is being sold and less tax is being collected.  Plus, new federal guidelines are forcing consumers into vehicles that go further on less fuel.

Governor Sonny Perdue is expected to sign new legislation that will create a 1% transportation sales tax option to fund specific projects within twelve regions.  Voters would need to approve the projects when they vote in 2012 elections, and there is no guarantee they will vote to hike taxes.

Long was asked what happens if voters reject local option transportation sales taxes.  “We’ll have to live with what we have,” Long said.  “That may happen.  We know that.  There are provisions in the bill where we could put it back.  If it passes in one region, and it’s going great, but it doesn’t pass in another region, then we could put it back before the voters within two years.”

Thursday’s summit was presented by the Center of Innovation for Logistics, which receives funding from OneGeorgia Authority.  Five other centers of innovation focus on agribusiness, aerospace, energy, life sciences and manufacturing.  The logistics center is headquartered in Savannah

The 2010 Georgia Logistics Report was released at www.report.georgialogistics.org.

Mike Klein is Editor at the Georgia Public Policy Foundation.

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May 7, 2010 - Posted by | Uncategorized | , , , , , ,

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