Economic Monitor Q1 2023: Regional economy’s slow growth continues
Slower growth of the Savannah metro economy continues for the sixth consecutive quarter, according to Georgia Southern University’s Q1 2023 Economic Monitor, even as the Hyundai Metaplant provides a positive undercurrent.
“The prospects for healthy regional economic growth through 2023 are becoming more dependent on hiring plans for the Hyundai Metaplant and its associated supplier manufacturers,” stated Michael Toma, Ph.D., Georgia Southern’s Fuller E. Callaway Professor of Economics. “The U.S. economy will likely experience a recession in the second half of 2023 and import-export traffic through major ports, including Savannah, has slowed considerably. Nonetheless, continued investment in port infrastructure to expand capacity is spurring additional supporting real estate development and job creation in the logistics ecosystem this year. Combined, these factors are likely to allow the Savannah metro economy to sidestep a downturn from the U.S. recession, but are creating some uncertainty about upside potential for growth in 2023.”
Tourism Leads Modest Growth in Region
The regional tourism industry carried the economy in the opening quarter of the year. Hotel room and short-term vacation rental tax receipts increased 5.2% while boardings at the airport surged 13%. Alcohol sales increased 1.1%. Car rental taxes dipped during the quarter but are up about 5% over the year. The tourism sector added 100 jobs during the quarter and is 5% higher than its pre-pandemic peak.
Metro Savannah employers collectively released about 600 workers during the quarter, dropping back to 200,500 total employees from 201,100 in the previous quarter. Despite this loss, total employment remains 1.5% higher on an over-the-year basis.
Employment in the service economy was mixed during the quarter. Education and health added 400 jobs, as did state and local government. Overall, however, the service sector shed about 600 workers. Business and professional services declined 400 jobs, falling 3,000 below its peak employment level one year ago. Retail trade employed 300 fewer workers as well.
Other leading service sub-sectors were generally flat. Logistics employment dipped 100 jobs as port activity notably declined. Combined, education and health remain the region’s top job-providing sector with 28,800 workers followed closely by tourism with 28,600 workers.
The goods-producing side of the economy grew modestly during the quarter. Manufacturing employment increased 300 workers to 19,800 and remained barreling along at its 50-year peak in the region. Construction employment declined 200 workers to stand at 9,200 jobs.
Private sector wages unexpectedly dropped during the quarter and returned to roughly the same level 18 months ago. The inflation adjusted average hourly wage rate in the metro area private sector was $25.01, a sharp drop of $1.50 per hour. The length of the private sector workweek was roughly 10 minutes longer at 32.3 hours.
The issuance of construction permits for single-family homes rebounded 12.5% from the previous quarter but remained 7% below year-ago levels. The upside swing to 603 permits is modestly above the 575 permits issued per quarter since early 2019.
However, the average value for each single-family unit decreased for the second consecutive quarter, falling 5% to $249,400 from $262,400 in the previous quarter. The six-month moving average of building permit value fell just below $260,000 in inflation-adjusted terms and is down from $310,000 in early 2021.
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.
Georgia Southern University, a public Carnegie Doctoral/R2 institution founded in 1906, offers approximately 140 different degree programs serving nearly 26,000 students through 10 colleges on three campuses in Statesboro, Savannah, Hinesville and online instruction. A leader in higher education in southeast Georgia, the University provides a diverse student population with expert faculty, world-class scholarship and hands-on learning opportunities. Georgia Southern creates lifelong learners who serve as responsible scholars, leaders and stewards in their communities. Visit GeorgiaSouthern.edu.
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