(March 6, 2017) - Armstrong State University’s latest Coastal Empire Economic Monitor, which analyzes data and identifies trends affecting the regional economy, reports that the Savannah metro economy slowed to a crawl in the closing quarter of 2016, largely due to the effects of Hurricane Matthew. As such, electricity and retail sales, as well as air travel, slipped. However, losses were offset by gains in employment, port activity and hotel room rentals. The area is expected to see healthy growth by mid-year.
“Although the economy lost quite a bit of momentum in the fourth quarter, the pace of growth will increase through the fall of 2017,” noted Dr. Michael Toma, Fuller E. Callaway Professor of Economics and the Director of Armstrong’s Center for Regional Analysis. “First-quarter growth is likely to improve noticeably and then return to an above-average trend by summer.”
In the housing market, building permit issuance for single-family homes rose 5.1% from the third quarter, but still remains 16% below levels from one year ago. The average valuation of building permits for single-family homes rose as well, from $215,000 to $233,100, which presents a one-quarter gain of 8.4%.
Additional highlights from the latest Economic Monitor include:
- The forecasting Coastal Empire leading economic index fell for the second consecutive quarter, but the regional housing and labor market appear poised to return to growth trends. The Coastal Empire leading economic index decreased 1.8%, falling from 154.8 to 152.1. An increase in consumer expectations and the number of residential building permits issued partially offset the declines.
- Although Hurricane Matthew put a dent in tourism activity, hoteliers recorded a 3% gain in seasonally adjusted room rental revenue during the 4th quarter, putting totals 7% ahead of previous-year levels. The number of visitors on tours in the city experienced a substantial slowdown, falling to 3% growth, as compared to 12% in the previous quarter. Despite the downturn, the tourism industry in Savannah continues to grow healthily and added 800 jobs during the quarter, bringing total employment in the sector to a record-high of 27,700.
- Overall, employment was 180,700 during the 4th quarter, presenting an increase of 1,100 jobs, which equals more than a 3.7% gain from the previous year. The leisure/hospitality workforce jumped by 800 while business/professional services added 700 jobs. Other sectors were stable, but retail trade shed 300 workers.
- In direct response to Hurricane Matthew, seasonally adjusted initial claims for unemployment insurance surged 48% from 609 claims per month to 898. The regional unemployment rate marginally increased to 5.1% in the last quarter of 2016, rising from 4.7% in the previous quarter. The unemployment rate was 5.1% in the fourth quarter of 2015.
The Coastal Empire 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 CRA@armstrong.edu.
Armstrong’s Center for Regional Analysis, housed in the university’s economics department, meets the applied research needs of Savannah's business and community organizations. Areas of concentrated research include regional economic forecasting, economic impact analysis, economic development and business expansion, tourism development, survey-based research and specialty reports on topics of state, regional and local interest.
NOTE TO MEDIA: Dr. Michael Toma, director of Armstrong’s Center for Regional Analysis, is available for telephone interviews at 912.344.2538. Media may also contact Melanie Simón at 912.344.2904 or Melanie.Simon@armstrong.edu for interview and image requests.