September 10, 2012
Valdosta State University continues to be a major economic contributor for the Valdosta Metropolitan Statistical Area (MSA), with more than $451.2 million generated through direct spending and the multiplier effect in 2010-11.The Valdosta MSA includes Lowndes, Brooks, Echols, and Lanier counties.
The study, conducted by the Center for Business and Economic Research (CBER), calculated the economic impact of the university’s expenditures, including capital projects, and student spending during the 2010-11 academic year.
The study shows that VSU generated 5,055 jobs (direct and indirect), creating an annual labor income impact of $208.7 million for the Valdosta MSA.
Approximately $109.4 million was attributed to local expenditures and represented the direct economic impact from ongoing economic activities of the university. Included in these expenditures were faculty and staff salaries (excluding benefits) earned by 1,302 fulltime and 526 part-time employees. VSU currently ranks within the top 10 employers for the Valdosta MSA.
“The CBER study confirms that Valdosta State University continues to fulfill not only its educational, but also its economic mission for the people of South Georgia,” said VSU President William J. McKinney. “This kind of economic impact further demonstrates that higher education, and VSU in particular, is not simply a cost but rather, an investment. We take this responsibility seriously, and will work to continually improve the return on that investment. “
Dr. Cindy R. Tori, professor of economics, in VSU’s Langdale College of Business Administration, states that more than 9 percent of the gross regional product and approximately one out of every 10 jobs in the Valdosta MSA are directly or indirectly influenced by the university’s economic activities.
During 2010-11, direct expenditures from capital projects reached more than $12.6 million. Included were renovations to Nevins Hall, Odum Library, Mass Media Building (former Bookstore), and construction of the Jerry and Kay Jennett Lecture Hall.
Tori estimates the university’s economic impact will continue to rise significantly with the future construction of the Health Sciences and Business Administration Building. Construction on the 140,000-square-foot building will begin later this month, and have an overall economic impact of more than $56 million with an estimated 1,190 jobs created throughout the construction period.
As VSU continues to attract more students, especially from outside the Valdosta MSA, the economic benefits continue to increase.
During the 2010-11 academic year the estimated average expenditure per student was $6,380 for fall and spring semesters, and $3,816 per student during the summer. Based on student enrollment during all three semesters, the estimated direct economic impact for ongoing student expenditures was $181.5 million.
Tori, who contributes to the South Georgia Business Outlook, a quarterly publication produced by the CBER that reports the economic condition and events which influences businesses in South Georgia, says that even during the nation’s slow economic recovery, VSU has remained a strong economic supplier for the Valdosta MSA.
“Since Valdosta received MSA status in 2003, the diversity of businesses has expanded leading to a larger multiplier associated with all economic activities,” Tori said. “Even though we have gone through a recession, economic activity has improved in our community and VSU has played a large part of this growth.”
Tori explains that the overall average multiplier for 2010-11 was 1.49; therefore, for every dollar of initial direct spending, an additional 49 cents of spending was generated within the Valdosta MSA. When local businesses and workers received payment from university-related local spending, they then spent a portion of their funds within the Valdosta MSA. The subsequent spending reflects the multiplier effect.
“I was surprised that the multipliers here locally have improved so much given the recent recession,” Tori said. “This is attributed to the visibility associated with a MSA designation and the labor market structure of our area. Having a really strong university in your community is a stabilizing force. The businesses that would normally fall by the wayside during an economic downturn are supported by VSU’s economic activities, especially student spending.”