Local economic uptick through year-end, says Georgia Southern’s Q4 Economic Monitor
The Savannah metro area economy remained on a remarkable rebound trajectory at the end of 2021, according to Georgia Southern University’s latest Economic Monitor, which reflects the fourth quarter of 2021.
“All major indicators of regional economic activity have increased,” said Michael Toma, Ph.D., Georgia Southern Fuller E. Callaway Professor of Economics. “The story of the fourth quarter is one of general economic strength in large parts of the regional economy. Port activity, logistics, tourism, retail sales and electricity sales supported the current economic activity index.
Economic growth continues in 2022
Economic growth in the Savannah metro area is expected to continue at a moderate but slower pace in 2022 compared to the rebound in 2021, Toma said. Regional employment is now 3% higher than it was before the start of the pandemic, and employment in tourism and hospitality returned to pre-pandemic levels in December 2021, well ahead on expectations. The forecast is challenged by near-term uncertainty related to emerging geopolitical instability that could disrupt energy markets and exacerbate the effects of worsening inflation.
Employment growth in the Savannah metro area was 1.4% (+2,800 jobs) in the last quarter of 2021. Total employment increased to 195,800, 3% more than the pre-pandemic peak of 192,100 in the fourth quarter of 2019.
Employment in the service sector added 2,700 jobs. Business and professional services jumped again, adding another 1,400 workers. Since the pandemic low in the second quarter of 2020, the sector has added 8,400 jobs, rising to a total of 30,600 workers. Logistics added 500 jobs (+2.7%) for the second consecutive quarter, reaching an all-time high of 18,300, 19% above its pre-pandemic level.
The tourism and hospitality sector added 1,000 workers to 26,800 for the quarter. It should be noted that the December figure of 27,400 is 1% higher (300 workers) than employment in the sector in February 2020 and the highest number since October 2019. Boardings at the airport increased by 1% while inflation-adjusted hotel sales moderated slightly in the quarter after gains of 20% and 60% in the previous two quarters.
On the goods-producing side of the economy, manufacturing added 100 jobs to 18,200 workers. This sector is back to 98% of its pre-pandemic peak. Construction employment held steady at 8,600 workers.
In the housing market, the seasonally adjusted number of single-family homes cleared for construction fell 16% after rising 20% in the third quarter, falling to 590 units from 698 in the previous quarter. By comparison, the number of permits issued per month has averaged 584 since the start of 2019. The average assessment per single-family unit, however, increased by 10%, from $239,000 to $263,000, reflecting the increased input prices and increased demand in the seller’s market for regional real estate. domain. Note that the value of the permit does not include the cost of the land.
Region poised for normalized growth
The Savannah area business forecast index jumped a massive 8.1% in the fourth quarter. The leading index rose to 172.3 from 159.3 in the previous quarter. The gain mainly reflects the improvement and normalization of the labor market.
In terms of the labor market, the number of initial unemployment insurance (UI) claims fell for the second consecutive quarter, falling 58% after a 68% drop in the previous quarter. The sharp declines followed the end of Georgia’s participation in the federal government’s Supplemental Unemployment Insurance benefits program in late June and the end of the federal supplemental program in early September. Monthly new jobless claims fell to 630 from 1,500 in the previous quarter. Thus, the seasonally adjusted unemployment rate fell to 2.3% against 2.8% in the previous quarter. The unemployment rate was 5.8% in the fourth quarter of 2020.
A final caveat from Toma: the recent spike in inflation (7.5% in January 2022) will have a dampening effect on consumer spending and demand in the economy which, coupled with the potential disruption of Global energy markets on the supply side of the increased likelihood of global geopolitical instability, could rapidly alter the economic landscape. This warrants close monitoring in the coming months.
A note from the analyst
The Economic Monitor is available by email and at the Center website. If you would like to receive the monitor by email, please send a “subscription” message to CBAER@georgiasouthern.edu.
The Economic Monitor provides a continuously updated quarterly snapshot of the economy of the Savannah Metropolitan Statistical Area, including Bryan, Chatham, and Effingham counties in Georgia. The coincident index measures the current economic pace of the region. The leading indicator is designed to provide a short-term forecast of economic activity in the region over the next six to nine months.
Georgia Southern University, a public Carnegie Doctoral/R2 institution founded in 1906, offers approximately 140 different degree programs serving nearly 27,000 students at 10 colleges on three campuses in Statesboro, Savannah, Hinesville, and online courses. A leader in higher education in Southeast Georgia, the University provides a diverse student body with expert faculty, world-class scholarship, and hands-on learning opportunities. Georgia Southern creates lifelong learners who serve as responsible scholars, leaders, and stewards in their communities. To visit GeorgiaSouthern.edu.