Robert Sumichrast, head of the University of Georgia's business school, delivered a grim forecast calling for a gradual improvement, but warned business and government leaders that the rebound will come in fits and starts.
"Our recovery will be slow and bumpy," Sumichrast said.
He spoke to Atlanta executives and government officials at the university's 27th annual economic outlook luncheon, his forecast coming against the backdrop of one of the bleakest economic periods in decades.
Sumichrast said the turnaround will lead to expanded Georgia jobs beginning in the spring, though not enough to keep pace with the number of people entering the market. As such, he warned already historic unemployment levels in the state could still hit 11 percent before tapering off in mid-2010.
Still, he said jobs in the health care industry, among temporary agencies and with the federal government should lead the way, with more financial jobs returning in late 2010.
"Job creation, and the income growth that accompanies it, is absolutely vital to the outlook for both consumer spending and the economy," he added, calling that the most important piece of the economic puzzle.
Sumichrast also noted other areas of the country may feel early effects of recovery sooner.
"Opportunities to take advantage of the economic recovery may be greater outside Georgia," Sumichrast said.
California-based RealtyTrac Inc. estimates that Georgia saw 9,664 foreclosure filings in November, among the highest rates in the nation.
The number of payroll jobs in October decreased 227,700 from October of 2008, with Sumichrast predicting as many as 370,000 jobs will vanish before the dust settles.
"Plus, Georgia's over dependence on development meant that the financial crisis did much more damage to Georgia's banks than to the nation's financial sector," said Sumichrast, who estimates job losses in financial firms were 30 percent deeper in Georgia than elsewhere in the country.
In Georgia, 24 banks have failed this year, according to federal regulators. Failures have been concentrated in Georgia, Illinois, California and Florida.
But Sumichrast said the state is indeed in a turnaround, with home values expected to correct themselves in upcoming months, and business spending set to increase sharply, especially for transportation equipment, computers and software.
The construction industry, meanwhile, will take even longer to recover than other sectors.
"Only in 2011 will Georgia's overall construction industry begin to make significant contributions to the state's economic growth," he said. "And until that happens, Georgia's economic recovery will continue to proceed more slowly than the nation's."
News for the nation wasn't much better. It could be 2013 before the labor market replaces the estimated 8.5 million jobs lost during this recession, according to David Wyss, chief economist at Standard & Poor's in New York. Wyss pointed to a silver lining: Rock bottom has come and gone.
"The slope is going to be upward from here," he concluded.