Prospects for Dalton

Dalton’s economy is very dependent on manufacturing, especially of carpet and floor coverings. Manufacturing accounts for around 32% of the area’s jobs compared to 9% for the state and 8% for the nation. This makes Dalton more sensitive than most cities to fluctuations in the business cycle and shifts in U.S. trade policies, including tariffs.

Dalton’s focus on manufacturing was an advantage during the initial recovery from the pandemic recession, due to both the rapid upturn in economic activity – especially the housing boom – and high demand for new vehicles. But in 2026, based on forecasts, U.S. and global economies will slow, tariffs will likely be high and housing activity will be subdued. Demand for the products of Dalton’s large floor covering manufacturing industry will be depressed, although I expect demand for carpet used in vehicle manufacturing to increase.

The build-out of recent economic development projects brought some diversification within manufacturing but did not diversify Dalton’s economy away from manufacturing. Still, Dalton’s proximity to Chattanooga should provide opportunities for creating high-paying jobs outside of manufacturing. One barrier to diversification is education. The number of people with college and graduate degrees is small compared to the number needed in many fast-growing industries.

Foreign direct investment has been strong. Several major economic development projects were announced between 2020 and 2023: two floor covering manufacturers, one electric vehicle parts manufacturer, one food processor and a solar power module manufacturer. Growth is slowing now that the projects in the pipeline have become integrated into the local economy.

Just before the pandemic, Novalis Innovative Flooring announced its first U.S. production facility in Dalton. The facility is adjacent to the company’s new North American headquarters and innovation center.

After the pandemic recession ended, Huali Floors, which produces resilient flooring, announced plans to build its first U.S. headquarters and manufacturing facility in nearby Murray County. Dalton’s specialized workforce and an extensive local support network helped land the project. The Georgia Ports Authority’s new Appalachian Regional Port was an important site selection factor because it offers an advantage for transportation and logistics. Cargo volumes handled by the inland port are surging. Dalton’s extremely low cost of doing business benefits the transportation and logistics industry and its prospects for growth.

Dalton’s location on Interstate 75 between Atlanta and Chattanooga makes it a good place for logistics, warehousing and wholesale companies. In 2025, LX Pantos, a South Korean company, purchased a massive logistics facility and plans to make the new center a hub for clients in the U.S. I expect Dalton’s transportation, distribution and logistics industry to grow in 2026.

Dalton is also a good site for auto parts manufacturing – like GEDIA Automotive Group, which makes parts for electric vehicles – because of easy accessibility to many major automobile assembly plants. Qcells – a Korean company that had already operated a large solar panel manufacturing facility in Dalton – completed a second expansion of its solar module manufacturing operations in 2023. And in 2024, Essentia Protein Solutions built a new broth manufacturing plant in the Carbondale Business Park.

Dalton’s proximity to and economic integration with the Chattanooga MSA will work to the Dalton MSA’s advantage. Given Dalton’s lower levels of college and post-college graduates and its small population, access to deeper pools of talent in Chattanooga makes it easier for Dalton to recruit high-tech manufacturing and high-tech companies. Dalton State College and the Georgia Northwestern Technical College help boost the skill level of the area’s workforce. High-tech employment accounts for 5.2% percent of the area’s jobs, which is about the same as the 5.3% share for the nation. But outside of manufacturing, there’s limited availability of high-tech, high-wage jobs.

Stricter enforcement of U.S. immigration laws is a problem for Dalton. People born outside of the U.S. account for around a fifth of Whitfield County’s population. In 2026, stricter enforcement of U.S. immigration laws will likely reduce the flow of international immigrants to the area and will cause some to leave the area. Dalton’s population will decline, which will shrink the area’s labor force. Labor force contraction will make it harder for existing businesses to expand and for economic developers to recruit new businesses.

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