The Savannah metro economy’s healthy growth continued in the opening quarter of 2024, according to Georgia Southern University’s Q1 2024 Economic Monitor.
“For the second consecutive quarter, strength was broad-based, with solid gains in electricity sales — reflecting growth in residential, commercial and industrial activity – along with consumer spending and boardings at the airport,” stated Michael Toma, Ph.D., Georgia Southern’s Fuller E. Callaway Professor of Economics. “The business forecasting index increased sharply, extending its gains for another quarter. Firming up in the housing market and favorable conditions in the labor market combined to push the forecasting index up. Overall, the forecasting index is sending a stronger signal about healthy economic conditions through the remainder of 2024.”
Employment Trends
Metro Savannah employers added 300 workers during the quarter, raising total employment to 206,400. Growth in the service sector modestly outpaced growth in goods-producing industries. In the first quarter, government employment increased faster than private-sector employment, but the private sector has expanded at a pace more than four times faster than the public sector since 2010.
In the service sector, several hundred jobs were added with most new workers concentrated in business and professional services (+500 jobs) and leisure/hospitality (+400 jobs) while retail trade and logistics each shed about 300 workers. Notably, business and professional services extended its winning streak to two quarters, adding 1,500 workers following a five-quarter period of weakness. Education and health remain the region’s top job-providing sector with 29,000 workers, followed by tourism with 28,000 workers.
The regional logistics sector shed about 300 jobs during the quarter, bringing total employment in that sector to 18,900, slightly above the annual figure for 2023, but about 10% higher than in 2021. The goods-producing side of the economy held steady with 32,700 workers during the quarter. Manufacturing employment increased by 100 and totals 22,400 workers. Manufacturing will continue to grow healthily through 2024 as the Hyundai electric vehicle plant and its suppliers aim toward a late 2024 opening date. Construction employment shed 100 workers but remained above 10,000 workers and exceeded the level of construction employment in 2006-07 before the Great Recession renormalized the regional residential construction sector.
After adjusting for inflation, private sector wages increased to $25.63 from $24.83 per hour during the quarter, a gain of 3.2% from the previous quarter. However, the length of the private sector workweek shortened by 2.6% (about 50 minutes) to 30.7 hours during the quarter and is 5.4% shorter than one year ago.
Port Activity
Port activity, as measured by the number of standardized containers handled in Georgia Ports Authority (GPA) facilities, fell modestly (-0.4%) in the first quarter but remains on a solid path of expansion with 7% growth as compared to six months ago and an 11% over-the-year gain. Multibillion-dollar investment in GPA facilities will, in the short term, add 30% to capacity by 2025, leading to a doubling of capacity within a few more years.
Housing Market
The seasonally adjusted issuance of construction permits for single-family homes held steady at 673 permits. This is 11.5% higher than year-ago issuance and 4.4% higher than six months ago. Further, the average building permit value for a single-family home increased by 4.9%, increasing to $251,500 from $240,000 in the previous quarter.
In the regional labor market, the monthly number of initial claims for unemployment insurance (UI) sharply increased (+31%) to 759 from 578 in the previous quarter. Although elevated, this is nearly 5% below the number of new claims six months ago and only 1.2% higher than one year ago. The regional unemployment rate barely ticked up one-tenth of one percent to 2.8% from 2.7% in the last quarter of 2023. Although new claims for unemployment insurance are about 10% higher than in the six months leading up to the pandemic recession of 2020, the regional unemployment rate has been roughly 3% for the past three years, indicating that the newly unemployed have reabsorbed back into the regional workforce.
There will be a continuing need for multifamily-unit construction in the next five years as population inflow and new household establishment associated with the standing up of the regional electric vehicle industry will increase demand for new and existing homes.
“Overall, the remainder of 2024 is expected to be a favorable period of sustainable economic growth,” Toma said. “The regional economy’s expected employment growth trend in 2024 is comparable to the annual rate (+2.6%) since 2010.”
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.
