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Armstrong economic report shows strong growth

POSTED: December 26, 2017 6:02 p.m.

Armstrong State University’s latest Coastal Empire Economic Monitor, which analyzes data and identifies trends affecting the regional economy, reports that the Savannah metro economy weathered the effects of Hurricane Irma and maintained strong economic growth through the third quarter of 2017.

“Although several key indicators of the current health of the Savannah economy were adversely affected in September by Hurricane Irma, strength in July and August kept the economy on its growth track during the third quarter,” said Dr. Michael Toma, Fuller E. Callaway Professor of Economics and the director of Armstrong’s Center for Regional Analysis.

“Sustained economic growth is projected in the region through mid-2018.”  

During the third quarter of 2017, Savannah metro employment increased by 1,700 jobs, or 1.2 percent, to 180,900 from the second quarter to the third quarter. Regional employment trended 2.7 percent ahead of year-over-year levels. Employment growth was led by local government, leisure/hospitality and education/health.

However, Hurricane Irma spiked unemployment claims. On a seasonally adjusted basis, the number of initial unemployment insurance (UI) claims doubled from August to September and remained elevated into October.

For the quarter, UI claims soared 38 percent, jumping from 522 claims per month to 722 claims per month. This effect is expected to be temporary, with the number of claims expected to return to trend as the year closes.

 

Additional highlights from the latest Economic Monitor include:

Tourism: Boardings at the airport increased 10 percent during the quarter and are currently running 20 percent ahead of last year. Although hotel room sales inched up 1.1 percent, trending 6.4 percent ahead of comparable data from last year, several other tourism indicators were down during the quarter due to Hurricane Irma. The number of visitors on tours in the city declined 8 percent, and alcohol sales declined 9 percent.     

 

Port activity: Activity at Savannah’s port facilities dipped by 1 percent compared to the second quarter, but remains 10 percent ahead of 2017 on a year-to-date basis. In addition, the number of containers handled went over three million units in September, marking the earliest that benchmark was surpassed.

 

Employment trends: Manufacturing employment held steady at 16,800 workers. Construction employment notably increased by 300 jobs to stand at an eight-year high of 7,400 workers. However, as of the third quarter of 2017, construction employment remains only 79 percent of its 2008 level, while total employment grew 12 percent since 2008. Employment in the leisure and hospitality sector of the economy increased by 700 workers, rising to a workforce of 27,500, up 5.5 percent from 2016.

 

Regional unemployment: The regional unemployment rate fell to 4.1 percent in the third quarter, dropping from 4.6 percent in the previous quarter. The unemployment rate was 5.2 percent in the third quarter of 2016.

 

Housing: Seasonally adjusted building permit issuance for single-family homes plummeted 23 percent during the quarter, likely a joint effect of flagging nationwide activity and the effect of Hurricane Irma’s passage and related evacuations.

 

Building permits: Building permits issued in the Savannah metro area for single family homes fell to 413 during the quarter as compared to 538 units (seasonally adjusted) in the second quarter.  The average valuation of building permits for single family homes increased 2.7 percent, rising to $223,500 from $226,000.

 

Economic/forecasting index: The Coastal Empire leading economic index fell 0.1 percent percent (-0.5 percent, annualized), declining to 159.8 from 160.0 (revised) in the previous quarter. The forecasting index was burdened by decreased building permit issuance and increased initial claims for unemployment insurance.

 

The Coastal Empire Economic Monitor presents quarterly economic trends and short-term economic forecasts for Savannah’s Metropolitan Statistical Area (MSA). The quarterly report measures the heartbeat of the local economy, based on the analysis of economic data from the U.S. Census Bureau, the U.S. Department of Labor’s Bureau of Labor Statistics, the City of Savannah, Georgia Power and the three counties in the MSA, Chatham, Bryan and Effingham.

The report presents a short-term forecast of the region’s economic activity in the next six to nine months and is available for free by email. To subscribe, email CRA@armstrong.edu.

Armstrong’s Center for Regional Analysis, housed in the university’s economics department, meets the applied research needs of Savannah's business and community organizations. Areas of concentrated research include regional economic forecasting, economic impact analysis, economic development and business expansion, tourism development, survey-based research and specialty reports on topics of state, regional and local interest.

Armstrong State University’s latest Coastal Empire Economic Monitor, which analyzes data and identifies trends affecting the regional economy, reports that the Savannah metro economy weathered the effects of Hurricane Irma and maintained strong economic growth through the third quarter of 2017.

“Although several key indicators of the current health of the Savannah economy were adversely affected in September by Hurricane Irma, strength in July and August kept the economy on its growth track during the third quarter,” said Dr. Michael Toma, Fuller E. Callaway Professor of Economics and the director of Armstrong’s Center for Regional Analysis.

“Sustained economic growth is projected in the region through mid-2018.”  

During the third quarter of 2017, Savannah metro employment increased by 1,700 jobs, or 1.2 percent, to 180,900 from the second quarter to the third quarter. Regional employment trended 2.7 percent ahead of year-over-year levels. Employment growth was led by local government, leisure/hospitality and education/health.

However, Hurricane Irma spiked unemployment claims. On a seasonally adjusted basis, the number of initial unemployment insurance (UI) claims doubled from August to September and remained elevated into October.

For the quarter, UI claims soared 38 percent, jumping from 522 claims per month to 722 claims per month. This effect is expected to be temporary, with the number of claims expected to return to trend as the year closes.

 

Additional highlights from the latest Economic Monitor include:

Tourism: Boardings at the airport increased 10 percent during the quarter and are currently running 20 percent ahead of last year. Although hotel room sales inched up 1.1 percent, trending 6.4 percent ahead of comparable data from last year, several other tourism indicators were down during the quarter due to Hurricane Irma. The number of visitors on tours in the city declined 8 percent, and alcohol sales declined 9 percent.     

 

Port activity: Activity at Savannah’s port facilities dipped by 1 percent compared to the second quarter, but remains 10 percent ahead of 2017 on a year-to-date basis. In addition, the number of containers handled went over three million units in September, marking the earliest that benchmark was surpassed.

 

Employment trends: Manufacturing employment held steady at 16,800 workers. Construction employment notably increased by 300 jobs to stand at an eight-year high of 7,400 workers. However, as of the third quarter of 2017, construction employment remains only 79 percent of its 2008 level, while total employment grew 12 percent since 2008. Employment in the leisure and hospitality sector of the economy increased by 700 workers, rising to a workforce of 27,500, up 5.5 percent from 2016.

 

Regional unemployment: The regional unemployment rate fell to 4.1 percent in the third quarter, dropping from 4.6 percent in the previous quarter. The unemployment rate was 5.2 percent in the third quarter of 2016.

 

Housing: Seasonally adjusted building permit issuance for single-family homes plummeted 23 percent during the quarter, likely a joint effect of flagging nationwide activity and the effect of Hurricane Irma’s passage and related evacuations.

 

Building permits: Building permits issued in the Savannah metro area for single family homes fell to 413 during the quarter as compared to 538 units (seasonally adjusted) in the second quarter.  The average valuation of building permits for single family homes increased 2.7 percent, rising to $223,500 from $226,000.

 

Economic/forecasting index: The Coastal Empire leading economic index fell 0.1 percent percent (-0.5 percent, annualized), declining to 159.8 from 160.0 (revised) in the previous quarter. The forecasting index was burdened by decreased building permit issuance and increased initial claims for unemployment insurance.

 

The Coastal Empire Economic Monitor presents quarterly economic trends and short-term economic forecasts for Savannah’s Metropolitan Statistical Area (MSA). The quarterly report measures the heartbeat of the local economy, based on the analysis of economic data from the U.S. Census Bureau, the U.S. Department of Labor’s Bureau of Labor Statistics, the City of Savannah, Georgia Power and the three counties in the MSA, Chatham, Bryan and Effingham.

The report presents a short-term forecast of the region’s economic activity in the next six to nine months and is available for free by email. To subscribe, email CRA@armstrong.edu.

Armstrong’s Center for Regional Analysis, housed in the university’s economics department, meets the applied research needs of Savannah's business and community organizations. Areas of concentrated research include regional economic forecasting, economic impact analysis, economic development and business expansion, tourism development, survey-based research and specialty reports on topics of state, regional and local interest.

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