Like the national and world economies, the Savannah area economy has been facing some stiff headwinds for more than six years now.
Those headwinds have abated to a significant degree, and a handful of positive trends have lately been promising better times ahead.
But a couple of headwinds picked up again last week.
For one, we learned that downsizing will result in the loss of the 2nd Brigade at Fort Stewart in 2015, two years earlier than anticipated. That means 1,900 fewer soldiers will be stationed there.
For statistical purposes, the Hinesville–Fort Stewart and Savannah metropolitan statistical areas are considered separate entities, but the reality is obviously trickier than that. Commerce between the two areas is constant.
The loss of so many troops is bound to hurt both the Hinesville and Savannah metro areas.
And the troop reductions will likely impact civilian jobs too, both in the private sector and public sector.
Those will come on top of the sizable cuts we’ve already seen in federal employment.
In 2013, the Hinesville metro area lost 500 civilian federal government jobs, according to estimates from the Georgia Department of Labor. The Savannah metro area lost 500 federal jobs, too.
Such losses have been predictable and unavoidable since sequestration was put in place. Continued sequester cuts and the accelerated timetable for downsizing will almost certainly result in additional job losses.
With public sector employment stagnating or declining, we will be relying entirely on the private sector for job growth.
And last week we learned that the inventory of homes for sale in the local area ballooned to more than nine months in January.
Realtors and homebuilders have many reasons to be optimistic over the long run, but it’s hard to ignore the fact January home sales were stagnant compared to January 2013.
The increased inventory will undoubtedly impact prices in some areas. As we know from the housing bust, poor market conditions for existing homes can also hurt new home construction and sales.
Although some momentum was lost at the end of the year, we saw a pretty strong recovery in both sales and prices for the Savannah housing market in 2013. These latest numbers suggest that we might not see the same rate of improvement in 2014.
There are other local economic sectors that seem likely to see steady growth over the next couple of years. But, as we’ve detailed here before, local employment has stagnated over the past year at a point well below the pre-recession peak.
The last thing we need is another headwind.
City Talk appears every Sunday and Tuesday. Bill Dawers can be reached at billdawers@comcast.net. Send mail to 10 E. 32nd St., Savannah, GA 31401.