The Savannah metro economy dipped modestly during the third quarter of 2024, as reflected in Georgia Southern University’s newly released Q3 Economic Monitor.
“As Hurricane Debby and Hurricane Helene side-swiped the regional economy in the fall, they left a noticeable dent in the fender,” stated Michael Toma, Ph.D., Georgia Southern’s Fuller E. Callaway Professor of Economics. “Growth was mostly on-trend through July and August, but September data reflected the adverse effects of the hurricanes. As a result, the Savannah metro economy dipped modestly during the third quarter of 2024.”
Similarly, he noted, the business forecasting index dipped slightly as the labor market absorbed the blows from the hurricanes, but particularly from Helene. The regional housing market improved during the quarter, but these gains were offset by the disruption in the labor market. While the forecasting index gave up some ground, this is a one-off hurricane-related effect. The index is expected to continue its moderate upward trajectory in the closing quarter of the year.
“The passage of the hurricanes, through their temporary disruption of the labor market, interrupted a generally favorable trend in the forecasting index,” stated Toma. “This quarter’s dip in the forecasting index is a one-time impact and is not likely to change the forecast trajectory of sustainable modest growth in the region. Through mid-2025, the Savannah metro economy is expected to expand at a pace of 2%.”
Employment Trends
Metro Savannah employers added 600 workers during the quarter, raising total employment to 207,800. In the service sector, employment gains of about 300 jobs each in logistics, tourism, government and education and health were partially offset by slippage in business and professional services (-700). During the past two years, the decline in business and professional services primarily reflects reduced employment in temporary help agencies (-2,700 jobs) with those workers likely shifting into non-temporary jobs given expansion in the regional employment base. Overall, the service sector added 900 jobs during the third quarter.
Hurricane Debby in August and Hurricane Helene in September undercut activity in the regional hospitality industry. Hotel and motel tax receipts collected for September were equal to those collected last September, even though the excise tax rate increased by one-third from 6% to 8% in the city of Savannah. Hurricane Debby affected August collections while Hurricane Helene effectively zeroed out any increase for September 2024.
As seasonally adjusted hotel and motel taxes declined 8.5% from the previous quarter, boardings at the airport also declined 5%. Concurrently, passage of the hurricanes also nicked retail sales, which fell slightly. The leisure and hospitality sector, however, did add 300 workers during the quarter, providing work for 27,600 employees.
Port activity maintained its long-term trend rate of growth during the quarter. The number of containers handled in Georgia Ports Authority facilities increased 1% to stand 13.1% higher than its year-ago level. The regional logistics sector added 300 jobs during the quarter and now employs 19,100 workers, modestly above the level during the past 12 months.
The goods-producing side of the economy added about 200 persons, rising to 33,200 workers during the quarter. Construction employment added 200 workers climbing to 10,700. Construction employment is at a 25-year high, exceeding the level during the overheated housing boom preceding the Great Recession. However, the construction portfolio is much more diversified than at this time in 2007. Manufacturing employment held steady at 22,500 workers and remains 4.6% higher than a year ago, more than double the rate of growth in regional employment.
Private-sector wages, after adjusting for inflation, fell 1.9% to $25.27 from $25.77 per hour during the quarter. Although lower than the previous quarter, over-the-year gains in wages remain higher at 2.7%. The hurricanes, however, likely shaved about 24 minutes from the length of the private-sector workweek to 30.5 hours, as temporary electricity outages briefly shuttered the doors of some local businesses.
Regional Labor Market
In the labor market, Hurricane Helene likely caused a 6.1% increase in the monthly number of initial claims for unemployment insurance to 731 from 689 in the previous quarter. This partially reversed the 9% decline recorded in the second quarter. In response, the regional unemployment rate increased to 3.2% from 3% in the previous quarter.
Housing Market
The seasonally adjusted monthly issuance of construction permits for single-family homes notably increased 12.3% to 711 permits from 633. This more than reverses the softness of the previous quarter and concurrently bumped the over-the-year gain to 10.3%. In addition, the average value for a single-family building permit issued increased 3.5% to $261,700 from $253,000 (building permit value does not include the cost of land).
A Note from the Analyst
The Economic Monitor is available by email and at Georgia Southern’s Center for Business Analytics and Economic Research’s website. If you would like to receive the Monitor by email send a ‘subscribe’ message to CBAER@georgiasouthern.edu.
About the Indicators
The Economic Monitor provides a continuously updated quarterly snapshot of the Savannah Metropolitan Statistical Area economy, including Bryan, Chatham and Effingham counties in Georgia. The coincident index measures the current economic heartbeat of the region. The leading index is designed to provide a short-term forecast of the region’s economic activity in the upcoming six to nine months.
