According to Georgia Southern University’s Q1 2023 Economic Monitor, the Savannah Metro economy’s slower growth continues for the sixth straight quarter, even as the Hyundai Metaplant provides a positive undercurrent.
“Prospects for healthy regional economic growth through 2023 are increasingly dependent on hiring plans for Hyundai’s meta-plant and associated component manufacturers,” said Michael Toma, Ph.D., Fuller E. Callaway Professor of Economics at Georgia Southern. “The US economy is likely to experience a recession in the second half of 2023 and import-export traffic through major ports, including Savannah, has slowed significantly. Nonetheless, continued investment in port infrastructure to expand capacity this year will further boost real estate development and job creation in the logistics ecosystem. Taken together, these factors will likely allow the Savannah Metro economy to sidestep a US recession slowdown, but create some uncertainty about the upside potential for growth in 2023.”
Tourism is leading to modest growth in the region
The regional tourism industry carried the economy in the first quarter of the year. Tax revenue from hotel rooms and short-term rentals increased by 5.2%, while airport boardings increased by 13%. Alcohol sales increased by 1.1%. Car rental taxes fell for the quarter but rose about 5% for the year. The tourism sector added 100 jobs over the quarter and is 5% above its pre-pandemic peak.
employment trends
Metro Savannah employers laid off a total of about 600 workers during the quarter, down 200,500 from 201,100 in the previous quarter. Despite this loss, overall employment continued to grow by 1.5% year-on-year.
Employment in services was mixed for the quarter. 400 jobs were created in education and healthcare, as well as in state and local government. Overall, however, about 600 workers were cut in the service sector. In the corporate and services sectors, 400 jobs fell, down 3,000 from the peak in employment a year ago. The retail sector also employed 300 fewer workers.
Other leading service subsectors were generally flat. Employment in the logistics sector fell by 100 jobs as port activity fell significantly. Taken together, education and health remain the sector with the largest number of jobs in the region with 28,800 employees, closely followed by tourism with 28,600 employees.
The manufacturing side of the economy grew moderately over the quarter. Manufacturing employment rose 300 to 19,800 and remained at its 50-year high in the region. Employment in construction fell by 200 workers to 9,200 jobs.
Private sector wages unexpectedly fell during the quarter, returning to around the same level as 18 months ago. The inflation-adjusted average hourly wage in the metro area’s private sector was $25.01, down a sharp $1.50 per hour. The weekly working time in the private sector was about 10 minutes longer at 32.3 hours.
real estate market
Single-family home building permits were up 12.5% sequentially, but were 7% lower year-on-year. The uptick to 603 permits is slightly above the 575 permits granted each quarter since early 2019.
However, the average value of each single-family home fell 5% for the second straight quarter to $249,400 from $262,400 in the previous quarter. The six-month moving average building permit value fell just below $260,000 after adjusting for inflation and is down from $310,000 in early 2021.
An Analyst’s Note
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About the indicators
The Economic Monitor provides a continuously updated quarterly snapshot of the economy of the Savannah Metropolitan Statistical Area, including Bryan, Chatham and Effingham counties in Georgia. The coincidence index measures the current economic pulse of the region. The leading index is intended to provide a short-term forecast of economic activity in the region over the next six to nine months.
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