Economic Prospects for Atlanta in 2025

Atlanta’s labor market will remain healthy due to its high concentration of IT, distribution and life sciences companies; service-producing industries; e-commerce fulfillment centers; institutions of higher education; healthcare providers; and headquarters operations. An educated workforce, above-average population growth and hubs in innovation, technology, logistics/distribution, professional and business services and healthcare will underpin Atlanta’s economic performance. Also, many large economic development projects announced from 2020 to 2024 are in Metro Atlanta.

In 2025, healthcare will be an important driver of the area’s economy, but the pace of job growth will slow as the industry has mostly caught up from COVID-related impediments. Expansions by Northside Hospital, Children’s Healthcare of Atlanta and other major providers will boost demand for healthcare workers.

Manufacturing will be a driver of Atlanta’s economic growth due to projects announced in 2024, such as Cargill and Resia Manufacturing. However, interest-sensitive sectors, such as real estate development, will not contribute too much to economic growth in 2025 despite recent rate cuts.

High-tech jobs make up 6.5% of total employment in the Atlanta MSA versus 4.8% for Georgia and 5.5% for the U.S. The area’s high concentration of college-educated workers, business partners, cybersecurity, high-tech companies, innovation centers and research universities will continue to attract companies in life sciences, software development, research and development, healthcare IT, professional and business services, transportation and logistics, and advanced manufacturing. High-tech startups and expansions are sensitive to interest rates and the availability of venture capital. In 2025, those factors will improve.

Atlanta’s high-tech development depends university research centers that transfer innovative ideas and technologies to local businesses. For example, Georgia Tech’s innovation district, Tech Square, attracts high-tech companies to Midtown, and the school’s expansion of Science Square, another innovation district, will catalyze the development of the life sciences and biotech industries. Phase 1, which includes Science Square Labs, opened in 2024. Sustaining growth requires talent, which Georgia Tech can deliver.

Metro Atlanta relies heavily on two cyclical industries – distribution and new construction. In 2025, distribution will expand, albeit more slowly than 2021-2024. The prospects for new construction activity vary by subsector – bright for government and manufacturing operations, dim for office. The housing downturn that began when mortgage rates rose in 2022 is over, but problems remain. Mortgage rates are still elevated, homes prices are high, and construction workers are in short supply. These factors will limit immediate prospects for homebuilders, but scant listings of homes for sale coupled with favorable demographics will support moderate growth of the area’s homebuilding industry in 2025.

The Atlanta MSA is highly specialized in transportation, logistics, warehousing and wholesale trade, with employment concentrated in these cyclical industries. Atlanta’s role as a high-tech inland port for these industries will increase in importance. The connectivity of Georgia’s ports to the interstate system, rail and air cargo is excellent. Atlanta is a low-cost, low-risk place to operate a warehouse. A lot of high-tech warehouse/distribution space is under construction, which will provide the capacity for growth of Atlanta’s transportation and logistics cluster.

The metro area’s hospitality industry initially struggled to recover from the pandemic-recession, but it did rebound. The business travel industry will contribute more to the area’s economy in 2025 than in 2024.

Increasing activity at Hartsfield-Jackson Atlanta International Airport will support economic growth. Planned improvements at the airport bode well for Atlanta’s future. The airport remains the world’s busiest and has excellent access to mass transit.

Production sites near Hartsfield-Jackson and cold storage facilities appeal to manufacturers of perishable biomedical products. Highly perishable or time-sensitive products are well suited to air transportation, and therefore the airport’s air cargo facilities are essential.

Favorable demographics will help Atlanta’s economy grow faster than the national economy. Net domestic migration ensures that the Atlanta MSA’s population expands about twice as fast as that of the nation. By population, the Atlanta MSA ranks fifth in the U.S. Larger-than-average proportions of people under 60 and lower-than-average proportions of people 60 and over will help economic growth. 

Jeffrey humphreys is Director of the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business.