Armstrong State University’s latest Coastal Empire
Economic Monitor is forecasting a slowdown in the Savannah area’s economy,
which is bad news for Georgia as the area has been one of the state's strongest success stories, along with the Atlanta and Athens areas.
Savannah metro area nonfarm employment, 12-month net change, Jan. 2009 to Sep. 2016
“If we look at the gains achieved in the first half of
the year, we can, by comparison, expect growth to slow in the coming months,”
said Michael Toma, Fuller E. Callaway Professor of Economics and the Director
of Armstrong’s Center for Regional Analysis. “The effects of Hurricane Matthew
will further test the resiliency of the economy during the fourth quarter.”
The Savannah area has been one of the fastest growing
areas in the state, adding 6,800 jobs over the past year for a growth rate of
3.9 percent, the, but the Center is questioning some of the employment data
being reported by the Georgia Department of Labor and the Bureau of Labor Statistics.
According to the Center, “the addition of employment in
each of the major sectors (tourism, education, healthcare, manufacturing,
etc.) does not match the total number reported for the region by the Bureau of
Labor Statistics (BLS). Sector-level employment was stable from the first to
second quarter at 177,000 workers, while the total reported by BLS indicates
growth of approximately 1,900 jobs during the quarter, to reach 177,500. Much
of the reported second quarter gain is anomalous because reported first quarter
total employment was less than the total of sector-level employment.
Further, it is likely that regional manufacturing data is
currently overreported by as much as 1,000 jobs, and will be revised downward
in the annual data benchmarking process conducted by the Georgia Department of
Labor in the first quarter of 2017.”
Looking at leading and coincident indicators, positive signs include increasing total regional
employment, along with increases in boardings at the airport and a rebound in
consumer confidence.
The Center notes that these indicators offset flatness in
hotel and retail sales and weaker activity at the port. In the housing market,
building permit issuance for single-family homes fell sharply by 10% from the
first quarter and was below year-ago levels by the same amount.
The latest report suggests that “expectations
about the regional economy’s growth should be adjusted downward through late
2016 and early 2017, due to mixed signals and the anticipated lingering effects
of Hurricane Matthew.”
You can read their full analysis here.
