Armstrong State University’s latest Coastal Empire Economic Monitor, which analyzes data and identifies trends affecting the regional economy, reports that the Savannah metro economy maintained its course of healthy growth through the third quarter of 2016. All current economic indicators increased from the second to third quarter, with the exception of retail trade. Among these, employment growth and port activity provided the most lift to the index of economic activity.
However, the forecasting index for the region declined during the quarter, which signals a potential slowdown on the horizon.
“Economic growth in the Savannah metro area is expected to slow through the end of the year and into mid-2017,” said Dr. Michael Toma, Fuller E. Callaway Professor of Economics and the Director of Armstrong’s Center for Regional Analysis. “The effects of Hurricane Matthew caused some drag on the economy, slowing its momentum as the year ends.”
In the housing market, building permit issuance for single-family homes nudged up slightly, but is down by 9% from levels one year ago. The seasonally adjusted number of new residential homes permitted for construction was 447, compared to 439 in the second quarter. As expected, the average valuation of building permits for single-family homes dropped sharply, falling from $250,000 to $205,000.
Additional highlights from the latest Economic Monitor include:
· As predicted in the previous quarter’s Economic Monitor, underlying weakness in the forecasting index surfaced in the third quarter. The Coastal Empire leading economic index fell 1.5%, declining from 157.2 to 154.9. Further, consumer expectations in the south Atlantic states fell for the second consecutive quarter.
· Tourism activity grew healthily during the quarter. Hotel room sales and airport traffic increased by 3.3% and 3%, respectively. Alcohol sales taxes were up 5% and automobile rentals increased by 4%. The tourism sector employs 26,900 workers, the single largest employment sector of the regional economy.
· Overall, employment averaged 179,600 during the quarter, while the figure topped 180,000 for the first time ever in August.
· In the labor market, seasonally adjusted initial claims for unemployment insurance (UI) fell by 16%. The number of new UI claims is 5% lower than one year ago and the regional unemployment rate held steady at 4.8%, as compared to 5.6% last year.
The Coastal Empire Economic Monitor presents quarterly economic trends and short-term economic forecasts for Savannah’s Metropolitan Statistical Area (MSA). 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 for free by email. To subscribe, email CRA@armstrong.edu.