The latest edition of Armstrong State University’s Economic Monitor, released today, indicates “broad-based support for economic activity across all sectors” during the fourth quarter of 2014, with expectations of sustained healthy growth throughout 2015.
“The region’s economic engine is firing on all cylinders, with all indicators up as we closed out 2014,” said Armstrong economics professor Michael Toma, director of the university’s Center for Regional Analysis.
“We’re seeing strong activity occurring in a range of areas, from housing and construction to tourism and manufacturing and have every reason to believe that trend will continue into the near future,” he said.
The Coastal Empire Economic Monitor analyzes data and presents quarterly economic trends and short-term economic forecasts for Savannah’s Metropolitan Statistical Area of Chatham, Bryan and Effingham counties.
The report measures the health of the area economy based on 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.
The Monitor’s coincident index, which measures the economy’s current heartbeat, increased 1.1 percent for an annualized pace of 4.9 percent, Toma said.
“This extends the period of very strong growth through the last year,” he said. “In fact, during the most recent 12-month period, the economy has expanded at its fastest pace since late 2004.”
Manufacturing and construction led the way, with growth on top of substantial revisions from previous quarters.
“Last year’s data really underestimated the recovery in these two industries,” Toma said, adding that the methodology of the U.S. Labor Department causes its data to lag behind. “Manufacturing data was revised upward by 1,300 jobs, closing the year with 16,500 workers and an annual gain of 6.5 percent.
“Similarly, construction employment was revised upward by about 9 percent, closing the year with 6,000 jobs, 500 more than the previous year.”
The majority of new jobs continue to come from the private sector, a trend that has remained consistent for the last five years, he said. And the leading index, which forecasts the short-term future growth of the area economy, grew at an annualized rate of 7.4 percent, Toma said.
“All leading indicators increased during the fourth quarter with gains in the regional housing market leading the way,” he said.
According to the monitor, building permits issued for single-family homes closed out 2014 with over-the-year gains of 17.9 percent. The number of new residential homes permitted for construction in the fourth quarter was 409 — the second highest quarterly gain in seven years.
The average value of those permits also saw a bounce, rising 8.2 percent from $192,800 to $208,700.
More highlights
Additional highlights from the latest Economic Monitor include:
• The tourism industry contributed significantly to the strength in the regional economy throughout 2014. Seasonally and inflation-adjusted hotel and motel room receipts increased 8.2 percent during the fourth quarter and were up about 17 percent for the year. Boardings at the airport were up 18 percent over last year.
• Port activity increased nearly 4 percent during the fourth quarter, in terms of TEUs (20-foot equivalent containers) handled at port facilities in Savannah. The port processed a record 3.3 million containers in 2014, marking a 10.3 percent increase over totals for 2013.
• Seasonally adjusted employment in the three-county metro area increased by 1,100 jobs to 168,300 during the fourth quarter of 2014. Employment levels are 4.6 percent higher than a year ago, with important gains made in tourism, manufacturing, transportation and construction employment.
• The number of new unemployment insurance claims dropped 17.8 percent below previous year data. During the same period, the unemployment rate fell to 6.2 percent (seasonally adjusted) in December 2014, posting a half percentage point lower than in December 2013. For the year, the unemployment rate fell from 7.5 percent in 2013 to 6.8 percent in 2014.
In short, the economic outlook continues to look good,” Toma said.
“Based on the latest data, we have every reason to believe the local economy will continue to expand through late 2015.”
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The Coastal Empire Economic Monitor is available by email and at the website of Armstrong’s Center for Regional Analysis at http://www.armstrong.edu/Liberal_Arts/economics. If you would like to receive the Monitor quarterly by email, please send a “subscribe” message to CRA@armstrong.edu.