Following an extraordinarily strong first quarter, the region’s economic numbers softened somewhat in the second quarter of 2017 but continued to grow steadily, a trend Armstrong State University economist Michael Toma predicts will continue beyond the New Year.
“Although we can expect a bump or two in the third quarter due to the effects of Hurricane Irma, sustained economic expansion in the Savannah metro area is expected through early 2018,” Toma said in the latest issue of ASU’s quarterly Coastal Empire Economic Monitor, released today.
After diving deeper into the second-quarter numbers, Toma said he became less concerned about the softness.
“On an over-the-year basis, the numbers in the three-county region of Chatham, Bryan and Effingham still look really good,” he said. “We’re still on track for solid economic growth, ranging anywhere from up 2.5 percent to up 5 percent in terms of the major indicators.
Toma, director of ASU’s Center for Regional Analysis, said the local housing market registered its third consecutive quarter of growth, despite declining national residential construction figures. Building-permit issuance for single-family homes in the Savannah Metro area increased by 8.5 percent in the first quarter, reflecting a 17 percent jump from the year prior.
Total employment in the three-county metro area slid 0.5 percent to 179,000, a decline of 800 jobs to 179,000. Nonetheless, regional employment remained 2.5-percent ahead of year-ago levels.
And, in what Toma said largely appears to be a correction of over-reporting in the first quarter, business/professional services and the hospitality industry recorded a decline in employment, but remain on-trend in terms of growth performance – both above 5 percent – during the previous twelve months.
“Notably, manufacturing employment increased 400 jobs to 16,800 workers in the second quarter, ending a five-quarter decline,” Toma said, adding that service sector employment was 154,500, some 2.4 percent ahead of the previous year.
“Activity at Savannah’s port facilities remains on a record-setting tear for nine consecutive months, with each each month setting a new mark for most-ever volume handled during the month,” Toma said, noting that, although there was a slight dip in volume in the second quarter as compared to the first quarter, container handling remains 13.4 percent higher than one year ago.
In the tourism industry, seasonally adjusted hotel room rental revenue dipped slightly in the second quarter, but remains 10 percent above last year’s level. The number of visitors on city tours declined 10 percent from robust first quarter numbers, but like other regional economic data, remains strongly ahead of results from 2016’s second quarter figures.
Airport travel increased by 2 percent and employment in the leisure and hospitality sector of the economy is approximately 27,000, or 4 percent higher than year-ago data.
The regional labor market continues to tighten in response to sustained increases in the demand for labor. Seasonally adjusted initial claims for unemployment insurance fell modestly from 535 to 522 per month, Toma said, as the regional unemployment rate fell from 4.8 to 4.6 percent.
ABOUT THE MONITOR
The Coastal Empire Economic Monitor, researched and produced by ASU’s Center for Regional Analysis, presents quarterly economic trends and short-term economic forecasts for Savannah’s Metropolitan Statistical Area. The quarterly report measures the state of the regional 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 Monitor is available free by email. To subscribe, send a request to CRA@armstrong.edu.