While the Savannah-area economy did not grow as expected in the first quarter of 2013, neither did it falter — instead holding steady despite falling consumer confidence, according to Armstrong Atlantic State University’s latest Coastal Empire Economic Monitor, which was released today.
“The fundamentals — employment, port activity, manufacturing and tourism — continue to look sound,” said Michael Toma, Fuller E. Callaway Professor of Economics and the Director of Armstrong’s Center for Regional Analysis.
“Consumer confidence took a hit in the first quarter — most likely due to concerns over sequestration,” he said, adding that the forecasting index for the region remains strong, boosted by gains in the housing and labor markets.
“The housing market appears to be gathering greater strength while the labor market continues its slow heal,” Toma said. “That suggests the economy will regain its footing and reset into a growth pattern through the remainder of the year.”
The first quarter of 2013 was primarily data driven, he said.
Among the highlights:
• Growth in employment, electricity sales and port activity buoyed the economy.
• The region’s employment level is only 2 percentage points shy of the pre-recession peak of 2007.
• Some 800 workers were added in the first quarter, leading to a five-year-high of 158,000 jobs (seasonally adjusted).
• The forecasting index has been on an upward swing for five consecutive quarters.
• The housing market is poised for its best year since 2008.
• While first-quarter tourism was weaker compared to the strong fourth-quarter finish in 2012, March hotel/motel sales-tax receipts tied the single-month record set in March 2012 and the hospitality industry posted a record-high 22,400 employees.
The housing market was especially encouraging, Toma said, with a 23 percent increase in building permits from the previous quarter indicating new home construction is picking up the momentum it was gathering in 2012.
“I expect housing to continue to improve through the remainder of the year.”
An extra benefit, Toma said, is the housing market is starting to spur employment growth for the first time in five years.
The unemployment rate has fallen and is the lowest quarterly unemployment rate in four years.
Although the regional economy saw little growth, Toma said, the outlook for 2013 is one of the more optimistic since the financial crisis and 2007-09 recession.
“I don’t think the economy really stalled in the first quarter,” he said. “Instead, the index was heavily influenced by consumer confidence shaken due to the uncertainty surrounding sequestration.
“Momentum is building and should continue through the rest of the year.”
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 presents a short-term forecast of the region’s economic activity in the next six to nine months and is available free by email. To subscribe, email CRA@armstrong.edu.