Happy New Year!  Feedback from our members reveals a strong collective desire to move past 2025 and dive into the new year. In Georgia, the greater agriculture industry is still grappling with the aftermath of Hurricane Helene, and specific to our industry, dealt a staggering $450 million blow to the sod and ornamental horticulture sectors. Beyond storm recovery, businesses faced significant headwinds in 2025: 52% reported rising material costs and 51% struggled with persistent labor shortages. These labor pressures, compounded by rising H-2A and H-2B visa wage rates, have significantly increased overhead for Georgia producers. I like to share Kiplinger’s economic predictions annually, and here are the 2026 predictions:

The economy will hold up relatively well. But it won’t feel especially good for everyone. The pattern of K-shaped spending…high-income folks splurging due in part to their investments doing well, while lower-income households curb their spending… figures to continue and may grow more pronounced. Once again, inflation won’t return to the 2% level the Federal Reserve aims for, while anemic hiring appears set to continue. That’s a tough combination for less affluent consumers. But barring a big drop in financial markets, the wealthy will spend freely.

• GDP – Moderate 2% growth is here to stay for a while. 2025 total annual growth will be around 2.1%, (because the annual growth figure is measured from 2024’s midpoint through mid-2025). Expectations are that this moderate growth trend will continue through 2026 and 2027.
• INTEREST RATES - The Fed faces a challenge: cutting rates to boost hiring while inflation remains above its 2% target. President Trump’s choice for Fed chair will likely support lower rates to stimulate the economy, but some Fed officials may object, prioritizing inflation control.
• HOUSING - The housing market is expected to become more active as mortgage rates fall to the low or mid 6% range. This should encourage more buyers, especially in regions like the Sun Belt, Florida, and Texas, where home inventories are high and prices may drop 2-5%.
• TARIFFS - U.S. tariff rates spiked in 2025 and show slight easing in 2026 as new trade deals and exemptions take effect, with some duties likely overturned by the Supreme Court. The U.S.-China trade war is expected to remain at a stalemate, as both countries seek stability ahead of midterm elections. Vietnam, India, and Thailand will gain greater access to the U.S. market, reducing China's share.

• JOBS AND WAGES - The unemployment rate is expected to rise steadily through mid-2026, reaching a peak of 4.8%, then falling back to 4.5% by the end of the year. Wage growth is projected to finish 2025 at around 3.5% and gradually slow to 3.0% by late 2026. It's important to note that wage growth often trails behind other labor market signals.

• INFLATION - U.S. inflation is expected to cool slightly by 2026 but remain above the Federal Reserve's 2% target. The projected year-end 2026 inflation rate for consumer prices is around 2.6%.
• CONSUMER SPENDING - Consumer spending growth is likely to be weaker going into next year because there are too many economic headwinds. Consumer sentiment measures appear to be softening again. The hiring slowdown in the labor market is creating job anxiety, even among those who are employed. Households tend to cut spending and add to savings when the possibility of losing a job looms. 

https://www.kiplinger.com/economic-forecasts

It’s all about the data – and UAC is commissioning an economic impact report from the University of Georgia in early 2026.  Working with UGA professor Ben Campbell, we look forward to sharing new data with our members, policymakers, and stakeholders.  Look for this report in 2nd quarter 2026.

Once again, we are monitoring the drought situation.  A very dry 6 months as we enter 2026 has us keeping our fingers crossed for winter and spring rain.  We will keep you advised of any changes to drought conditions and outdoor water use rules. 

Please enjoy this January 2025 UAC Digital Magazine, and we hope to see you at one of the many events planned – starting with Landscape Pro University 2026 on January 28!