ATLANTA – The Savannah economy is tracking the state again in growth, according to Georgia State University, which released its quarterly forecast Wednesday.
The outlook by the university’s Economic Forecasting Center projects metro Savannah to grow by 2.5 percent this year, matching the state forecast. Next year, the region zooms ahead of the state with a 2.7 percent expansion compared to just 2.0 for Georgia overall.
Job gains due to the deepening of the Savannah River shipping channel will offset the impact from weakness in global exports, the forecasters said. The local construction sector added 90 jobs in the final three months of last year.
Hospitality added more than half the new jobs last year, creating 640 just in the October-December period.
“Following a gain of 4,300 jobs in calendar year 2013, the Savannah (metro area) posted another strong year of job creation with 3,900 jobs in 2014,” the forecasters wrote. “Total employment in Savannah grew by 1,100 positions in the fourth quarter with strong additions in several sectors.”
Hiring sectors included transportation/utilities with 390 jobs, education/healthcare with 210 and corporate with 360.
Fueling growth for Georgia and the nation is the 50 percent drop in the price of petroleum in the last six months. That will free up money for consumers and businesses to spend elsewhere, according to Rajeev Dhawan, director of the Forecasting Center.
“People are rational economic agents,” he said. “They will splurge some on discretionary spending (eating out, for example), but otherwise will hoard and channel the savings towards a down payment on a home or other big-ticket items, like cars.”
That has also boosted some sectors important to the Georgia economy.
“Strong consumer confidence, buoyed in part by continuing job growth and a resurgent stock market, has reinflated consumers’ wealth position and their ability to spend, which is in turn good news for our hospitality, transportation, government coffers, trade sector and the area’s real estate and construction sector,” he said.
Cheaper energy will also boost the state’s manufacturing sector, which could lead to added hiring.
However, the oil-price drop is stalling gas and oil development, which impacts some Georgia companies that supply that industry. Also weakness in China and Europe are depressing exports, which is a negative for some Georgia businesses.