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For the sixth consecutive quarter, metro Savannah’s economy chugged sluggishly along, with strong tourism and port-related numbers — and a rebound in consumer confidence — accounting for much of the modest growth, according to Armstrong Atlantic State University economist Michael Toma.
However, in the second-quarter issue of the Coastal Empire Economic Monitor, the director of Armstrong’s Center for Regional Analysis cautions that continued growth in early 2014 is questionable, based on diminished momentum in the leading index.
The coincident index — that measures the current economic heartbeat of the region — is showing modest growth, as it has for a year and a half, Toma said. But the leading index — which provides a short-term forecast of the region’s economic activity in the next six to nine months — has flattened.
“The numbers aren’t going down,” he said. “But the leading index appears now to be nearly stalled.”
Mixed signals in the housing and labor markets contributed to the slowdown and undermine the clarity of the forecast going forward, Toma said.
“The leading index has been losing momentum for several quarters, but this is the first quarter it has actually stalled,” he said. “For example, new home starts were way up in the first quarter, then dropped 15 percent in the second.
“This could just be an anomaly. Or it could indicate weaker growth in early 2014.”
At any rate, the trend is one worth watching closely, he said.
Highlights from the second quarter Economic Monitor, released today:
• The Coastal Empire coincident economic index increased by three-tenths of a percent (1.1 percent, annualized), rising to 158.1.
• Employment in the three-county regional economy increased by 400 workers to 158,800 (seasonally adjusted).
• Hotel rooms sales increased by 3.5 percent as compared to the first quarter.
• The Coastal Empire leading economic index increased only 0.1 percent, rising to 126.9 from 126.7 (revised) in the previous quarter.
• Unemployment insurance claims surged nearly 20 percent to 1,253 claims per month, forcing the unemployment rate up nearly one-half percentage point to 8.1 percent (seasonally adjusted).
• The seasonally adjusted number of new residential homes permitted for construction was 282, marking a sharp decline of 15 percent from the opening quarter of the year.
• Year-to-date residential construction permits issued remains 23 percent ahead of the pace set in 2012.
• The value of the average building permit issued for a single-family home jumped 16 percent to $178,500 from about $154,000.
ABOUT THE MONITOR
The Coastal Empire Economic Monitor presents quarterly economic trends and short-term economic forecasts for Savannah’s Metropolitan Statistical Area.
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 free by email. To subscribe, email CRA@armstrong.edu.