The Savannah metro economy sped up in the first quarter of 2016. Total employment and most other economic indicators drove and strengthened the regional economy according to a the Coastal Empire Economic Monitor, published by Armstrong State University.
The labor and housing markets both trended up and consumer expectations in the South Atlantic states remained consistent. The Economic Monitor predicted that the pace of growth in Q2 would continue at about the rate of Q1.
Current Economic Indicators Pick Up Pace
The Coastal Empire coincident (measures current activity) economic index rose from 171.8 to 172.5. This was a welcome trend as it had dipped some in the second half of 2015. The index grew at an annualized pace of 3.3% for Q1 of 2016.
The index measures things like growth in total employment, electricity sales, retail sales, port activity and consumer confidence. All except consumer confidence drove the index higher in the first quarter. Even though consumer confidence was weak in Q1, it looked as if it is headed back up for Q2.
Labor Market
Employment in the Chatham, Bryan and Effingham area rose by 1,300 jobs and averaged 175,600 for the quarter. That represented a growth rate of 3.6% compared to the same time last year. This is the seventh quarter in row that job growth has been above the 3% mark.
Savannah metro area employment has averaged a 3% increase — the best growth rate since pre-recession days (2005 to 2007). But the recent job increases have come from a wider area of job sectors, unlike the pre-recession job growth which was primarily driven by construction activity.
Here’s a quick overview:
Business and professional services employment gained 700 jobs — 10% more than a year ago. Tourism and retail added nearly 300 workers. As a whole, the service sector grew by about 1,200 jobs. Tourism continues to thrive in Savannah as more people visit the area. In fact, tour buses and trolleys saw a 6% increase for the quarter compared to the first quarter of 2015. Auto rental sales (+3%) and beer/wine/alcohol sales (+4%) have also climbed higher compared to last year.
Manufacturing added 200 jobs, but construction lost 100 jobs. Despite the losses, construction has held steady at 6,400 for the last five quarters, while employment in manufacturing rose to 18,100 jobs during the first quarter of 2016.
Leading Indicators Rise Too
The Coastal Empire leading (future activity) economic index rose 1.4% (5.5%, annualized) from 152.4 to 154.5 — thanks to the average value of building permits for single-family homes going up and new filings for unemployment insurance going down.
Housing Market
Since early 2015, 500 or so building permits have been issued for single-family homes each quarter. For Q1 of 2016, the number of new home permits dropped 4.4% from 509 to 487. The number of building permits issued was down 1% (6 units) from a year ago. But the average value for building permits for single family homes climbed 23% from $205,600 to $251,800 . But look for it to settle back down in Q2, as it has hovered around $205,000 for the last year.
Labor Market
Initial claims for unemployment insurance (UI) declined 14% from 758 to 651 claims. The number of new UI claims is down 15% compared to last year. Also, the Savannah area unemployment rate has dropped dramatically during the last year from 6.5% to 5.2% (seasonally adjusted).
The Economic Monitor summarized their findings by saying that Savannah’s current economic activity has “picked up during the opening quarter of 2016” and forecasted that Savannah’s regional economic growth “is sustainable through the end of 2016.”
You can read the entire report here.
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