After slogging along with marginal growth for more quarters than anyone wants to count, the Savannah-area economy took off in the fourth quarter of 2013, according to economist Michael Toma, author of the Coastal Empire Economic Monitor.
The Fuller E. Callaway Professor of Economics and the Director of Armstrong Atlantic State University’s Center for Regional Analysis reports the Savannah-area economy expanded rapidly during the fourth quarter of 2013 and should continue to experience significant growth throughout 2014.
The fourth quarter Economic Monitor, released today, reports activity accelerating to nearly 5 percent on an annualized basis. Significant gains in electricity sales, tourism and port activity contributed to the quickening pace of economic expansion.
Of particular note was the addition of more than 500 tourism jobs, bringing seasonally adjusted employment in the three-county metro area to an average of 162,400 for the quarter, just 200 jobs shy of the pre-recession peak reached in the second quarter of 2007.
“That 200 is just statistical noise, in my opinion,” Toma said.
“I think it’s safe to say we’re back.”
In fact, employment hit an all-time high of 163,200 in October before trailing off slightly in December, he added.
“Job numbers were down from November to December, but December’s numbers were still higher than in December 2012,” Toma said.
In another healthy development, private sector employment growth continued to far outpace government sector employment, with 12,000 new private-sector jobs created since 2010, up 11 percent.
For the same period, government sector employment was down 3 percent, losing 800 jobs.
Other bright spots in Toma’s positive report for the fourth quarter:
• Hotel room sales and numbers of tourists on trolleys and tour buses were up 6 percent compared to one year ago.
• In the labor market, the fourth quarter of 2013 marked the second consecutive quarter the average number of unemployment insurance claims dropped below 1,000 claims per month, a benchmark not achieved since early 2008.
• Unemployment decreased to 7.1 percent (seasonally adjusted), which is one full percentage point lower than a year ago.
As for first half of 2014 and beyond, the monitor’s leading economic index — which predicts economic activity for the next six-to-nine months — surged again, registering the eighth consecutive quarter of growth, Toma said.
Significant improvement in the regional housing market was supported by improvement in the labor market.
The seasonally adjusted number of new residential homes permitted for construction in the fourth quarter was 337, a 1 percent increase from what Toma called “the blistering pace” of the third quarter, but up 30 percent from the fourth quarter 2012.
Another healthy sign: The average value of a building permit for a single-family home was up 20 percent, from $173,500 to $206,500.
In the labor market, seasonally adjusted initial claims for unemployment insurance edged up slightly during the quarter, from 964 to 985, the second consecutive quarter with claims averaging fewer than 1,000.
“That hasn’t happened in five years,” Toma said.
The seasonally adjusted unemployment rate was 7.1 percent for the fourth quarter, a full percentage point lower than the same quarter a year ago.
In conclusion, both the monitor’s coincident index — which reflects current economic activity — and its leading index — which forecasts short-term future growth — are strong, with no foreseeable red flags, Toma said.
“Combined, these are very positive signals for Savannah’s metro- area economy,” he said. “We can expect continued and strengthening economic growth through late 2014.”
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The Coastal Empire Economic Monitor, a quarterly report by Armstrong Atlantic State University’s Center for Regional Analysis, is available free by electronic mail. To subscribe, email CRA@armstrong.edu.