In what he called the strongest complete report in six years, Armstrong State University economist Mike Toma said the Savannah-area economy continued to grow at a rapid rate in the first quarter of 2014, proof that the previous quarter’s strong growth was no fluke.
The quarterly Coastal Empire Economic Monitor, released today, tracks 13 economic indicators in the Savannah metropolitan statistical area — Chatham, Bryan and Effingham counties — designed to provide continuously updating snapshots of the health of the area economy.
The report measures the current heartbeat of the region and also offers a short-term forecast for the next six to nine months.
“Savannah’s economy has been strengthening and should continue to do so for the rest of the year,” said Toma, Fuller E. Callaway professor of Economics and the director of Armstrong’s Center for Regional Analysis.
“In the first quarter of 2014, the coincident index (the current state of the local economy) pushed securely above the pre-recession peak of 2007, while the forecasting index increased sharply,” Toma said. “The combined message from both indices is that Savannah’s economy is growing in a healthy and sustainable manner.”
A significant improvement in the housing market was coupled by a notable uptick in the labor market, he said
“In addition, we’re seeing the fastest nine-month pace of economic growth recorded since 2006.”
Growth in the first quarter was particularly strong in tourism and electricity sales, which are a broad indicator of residential, commercial and manufacturing activity. Increases in employment, port activity and retail sales also contributed to the regional economy’s acceleration.
Seasonally adjusted employment in the three-county metro area averaged 163,700 for the quarter, topping the pre-recession high by 1,000. Large quarterly gains of more than 800 jobs were reported in professional/business services, leisure/hospitality and transportation/utilities. Construction and manufacturing each added 100 jobs.
Tourism leads way
With 24,100 jobs, tourism has passed education, health care and government in the number of total jobs generated, Toma said.
“That many tourist dollars coming through the area continue to contribute to the diversity of the cultural, entertainment and recreational amenities we have to offer,” he said. “It would be difficult to imagine the kind of diversity we have without the flow of tourists through our metro economy.”
Michael Owens agreed.
“Tourism is economic development,” said Owens, president and CEO of the Tourism Leadership Council. “The numbers show the importance of our industry to our local economy and the crucial role tourism plays in increasing quality of life.”
What the numbers won’t reflect, he said, are the personal success stories and career paths made possible by an industry that trains on the job.
“Tourism not only provides career opportunities, it enhances quality of life by supporting cultural activities, historic sites and museums, festivals and even restaurants that would not be possible without the financial support the tourism community provides.”
The regional tourism industry continues to fare well in 2014, according to Toma.
Hotel and motel room receipts are 7.4 percent ahead of previous year data through the first quarter.
Construction, labor numbers strong
Home construction, which has shown consistent improvement since early 2012, remains on an upward trend, Toma said, despite the fact the number of new residential homes permitted for construction dipped to 324 from 337.
“One explanation for that decline could be a regulatory change that took effect in January, inducing some builders to ‘stock up’ on permits before the first of the year,” he said.
Even so, compared to year-ago data, first-quarter permits are up 2 percent and represent the highest first-quarter number since 2008.
The average value of a building permit for a single family home was $210,300, up 37 percent over the same quarter last year.
“The labor market is looking good, too,” Toma said, noting that seasonally adjusted initial claims for unemployment insurance fell approximately 10 percent to 888 claims per month.
“This is the lowest pace of new claims in nearly six years,” he said.
“When you take all of these indicators together, there’s very little doubt Savannah’s economy is getting healthier every quarter.”
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 is available free by email. To subscribe, email CRA@armstrong.edu.