October 08 2020

Atlanta Office Market Report – Third Quarter 2020

ECONOMIC OVERVIEW

Like the rest of the country, the Atlanta economy continues to weather the effects of the ongoing COVID-19 pandemic. Fortunately, in the Atlanta area the midsummer surge in hospitalizations has steadily declined since the beginning of July and the positivity rate on tests has trended closer to the 5% threshold indicative of community control of the coronavirus. While caution is still warranted, it is encouraging that more retail, restaurant, and office businesses have been able to reopen after adopting established guidelines to protect their customers and workforce.

Looking at the most recent payroll numbers from the Bureau of Labor Statistics, Atlanta lost 318.6k jobs in March and April, quickly recovered 140.4k of those jobs in May and June, then stalled out in July and August as Georgia responded to a resurgence in coronavirus cases. As of now, using seasonally adjusted payroll data, we have recovered 56% of jobs lost during the March/April lockdown. It is important to note that the recovery has been uneven across industries with office related sector only recovering 37% since May. However, it is encouraging to see the vital Trade, Transportation, and Utilities sector, which employs nearly 600k people, has recovered a more robust 80% of jobs. Looking ahead, the Economic Forecasting Center of Georgia State University projects that Atlanta will end 2020 down 187k jobs for the year, turn around in 2021 by adding 47k jobs, and experience broader recovery in 2022 to add 123k jobs.

Despite the challenges posed to the broader economy by COVID-19, Atlanta continues to prove itself as competitive and business friendly. The recent announcement by Papa John’s that it plans to relocate their global headquarters to Atlanta and with it, new jobs in marketing, e-commerce, menu innovation, and development shows that the fundamentals of the Atlanta economy remain strong. Attractive demographics and a deep pool of talent will help return the region to growth once the coronavirus is controlled and consumer confidence returns in full.

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