Georgia Southern University’s latest Economic Monitor, which analyzes data and identifies trends affecting the regional economy, reports that the Savannah metro economy ticked up modestly despite Winter Storm Grayson, which blanketed the area in heavy snow and ice fall in early January.
Indicators of economic conditions were slightly mixed due to the weather-related incidents. However, the surging forecasting index is based on renewed strength in the housing and labor markets, which points toward increased growth during the rest of the year.
“Overall, expansion in the regional economy remained modest, but marginally improved from the closing quarter of 2017,” said Michael Toma, Ph.D., Fuller E. Callaway Professor of Economics and director of the Center for Business Analytics and Economic Research. “Expect increasing economic strength in Savannah-area business conditions during the remainder of 2018.”
During the first quarter of 2018, the Savannah metro total employment figure remained flat at 179,000, up only 0.5 percent over the previous year’s data. Early data from the second quarter suggests improved conditions will push year-over-year gains to about 1 percent.
Additional highlights from the latest Economic Monitor include:
· Tourism: On Jan. 3, Winter Storm Grayson dropped between 2-6 inches of snow on the region, thereby shutting down business and travel for up to five days. Tourism activity in the first quarter was soft, with hotel room sales and vacation rentals dipping four percent on a seasonally adjusted basis as compared to the fourth quarter of 2017. The number of visitors on tours in Savannah declined 10 percent.
· Port activity: Activity at Savannah’s port facilities fell by 3 percent compared to 2017’s closing quarter and is up 6 percent from this time last year.
· Employment trends: Employment growth has slowed, remaining flat for the first quarter of 2018, however, some sector-level changes are notable. Construction added 300 workers, manufacturing added 200, while retail and state government lost 200 workers. Year-over-year, the healthiest growth was in manufacturing, wholesale trade, business and professional services and leisure and hospitality.
· Regional unemployment: Unemployment insurance claims dropped from 631 to 541 in the first quarter of 2018, representing a 14 percent quarterly decline. The regional unemployment rate fell to four percent in the first quarter, dropping from 4.1 percent in the previous quarter. The unemployment rate was 4.8 percent in the first quarter of 2017.
· Residential construction: Residential construction in the region improved over last quarter’s performance. Seasonally adjusted building permit issuance for single-family homes soared 18 percent, in contrast to weak nationwide residential construction. Building permits issued in the Savannah metro area for single-family homes increased to 522 during the quarter compared to 443 units (seasonally adjusted) in the fourth quarter. The average valuation of building permits for single-family homes fell seven percent, dropping from $238,000 to $221,000.
· Economic index/forecasting index: The leading/forecasting economic index showed a 2.4 percent increase from 162.5 to 166.3 in the previous quarter, reflecting sharp gains in residential construction and falling unemployment insurance claims.
The 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 email@example.com.