Economic Monitor for 4th Quarter 2010 Now Available
(March 6, 2011) The Coastal Empire Economic Monitor for the fourth quarter of 2010 is now available at http://www.econ.armstrong.edu/cra/monitor.htm.
Savannah’s economy growth rate continued to slow as 2010 drew to a close, but expansion pushed ahead at a modest rate. An encouraging sign is that consumer expenditure and employment growth firmed up, as compared to the third quarter.
The Coastal Empire leading economic index flat-lined for the third consecutive quarter with continued weakness in residential construction and mixed signals from the labor market stymieing upward movement.
“The signal being sent is that, in the absence of other factors, the regional economy’s growth trajectory will continue to flatten well into 2011,” said Michael Toma, director of Armstrong’s Center for Regional Analysis, which publishes the Economic Monitor. “However, there are several mitigating factors that suggest stronger growth is on the horizon than currently implied by the leading index.”
Consumer spending, as measured by retail sales tax receipts and general employment growth, provided a substantial lift to the coincident index, which rose three tenths of one percent. Improvement in these two bedrock foundations of the economy is welcome news.
Additionally, seasonally adjusted employment in the Savannah metro area increased by 400 workers, rising to 151,500, while the service sector of the economy added about 600 jobs, primarily in retail trade, business/professional services, and education/health services. This is a favorable mix of employment growth in sectors of the economy serving as bellwethers of underlying consumer and business activity.
The tourism industry continued its solid recovery, but consumer confidence and port activity declined slightly. At the same time, the goods-producing side of the economy shed nearly 200 workers, 100 each in construction and manufacturing.
“Overall, employment during the closing quarter of 2010 was higher by approximately 1,570 workers, as compared to the fourth quarter of 2009,” said Toma. “This represents a one percent growth rate in regional employment and places the Savannah MSA among the top two performing regions in the state.”
Two additional factors further signal a more favorable economic outlook. The first has to do with unemployment insurance claims following an expansion of eligibility of up to 99 weeks. Those claims by individuals seeking continued coverage are counted as “initial” claims rather than “continued” claims, thus biasing the leading index downward.
Second, a conservative review of the series of announcements by major manufacturers regarding hiring plans for 2011 suggests regional manufacturing employment will increase by approximately 500 workers, which, combined with a conservative economic multiplier and additional employment factors, projects an estimated growth rate in regional employment for 2011 of approximately 1.5 to 2 percent.
“The economy remains on track for continued expansion, but the strength of it will depend in no small measure on the hiring activity of the region’s headlining manufacturers,” said Toma.