Effingham County’s economy is heading in the right direction and could do so for a while, community leaders learned at the annual Effingham Chamber of Commerce retreat.
State legislators and Michael Toma, director of Armstrong State University’s Center for Regional Analysis, pointed to the local economy’s rebound from the 2008 recession and the signals for continuing growth.
“The future of Effingham County is bright and the future of southeast Georgia is bright as well,” said state Sen. Jack Hill.
Effingham County’s unemployment rate was 8.9 percent at the depth of the recession, but the jobless rate has plummeted to 5.7, according to the state Department of Labor’s preliminary numbers for July.
“There is long term growth and development in the direction you want to see growth in,” Toma said. “The long-term prospective is to keep doing what you’re doing. I think we’re seeing good, solid, rounded economic growth.”
The crash in the housing market brought down many other sectors with it, leading to the economic downfall of 2008-09. But the local economy, made up of the counties in the Savannah metropolitan statistical area, is different than it was less than a decade ago.
“The growth is more broadly-based, it’s not just housing,” Toma said. “You see strong activity in tourism growth, the ports. The economy is creating jobs and not just in construction.”
Though single-family housing permits are up — more than 550 for the second quarter of this year in the Savannah MSA compared to barely more than 200 in the first quarter of 2011 — the construction workforce has not rebounded. Toma pointed out construction employment, at the height of the building boom in the mid-2000s, was 10,500, and it now stands at just over 6,000.
Effingham County’s new home sales nosedived from 299 in 2007 to 67 in 2009 and 66 in 2010. The numbers jumped in 2011 to 203 and went up to 322 last year.
“We don’t have this irrationally exuberant investment in housing,” he said. “I think we’re building to our demand at this point.”
The national economy is growing at just over 2 percent, “kind of slow and steady growth,” Toma said. Most forecasts, he added, predict growth at 2.7 percent for the remainder of 2015 and at 2.9 percent for 2016.
“It was not spectacular growth coming out of the 2007-09 recession,” Toma said. “We had a couple of dips in 2011 and 2014, but not necessarily sufficiently economic painful to be a recession.”
The Coastal Empire’s economy “has really taken off” the last nine quarters, according to Toma. The growth rate is close to the pace set in the mid-2000s, and last quarter’s growth was driven by export activity. Toma said that is surprising, given the strength of the U.S. dollar.
Consumer expenditures also are up significantly and state and local government spending, which usually doesn’t affect the national economy, is on the rise, reflecting an increase in retail activity through sales taxes.
As unemployment has fallen, the reason isn’t because of government hiring, Toma said.
“It’s all private sector,” he said. “The economy has recovered in terms of employment growth over the last nine quarters. That growth has been entirely in the private sector. We have way more jobs than we had at the peak of the last cycle.”
There are more than 160,000 people working in the three-county Savannah MSA, which includes, Bryan, Chatham and Effingham, and the employment level is pushing 170,000. Unemployment in the Savannah MSA, which was 7.9 percent last July, is now down to 6.1 percent.
“When the unemployment rate is close to 5 percent, you’re almost at full employment,” Toma said. “There is always going to be ebb and flow in the labor market.”
Labor issues on the West Coast and at some East Coast ports have driven business to Savannah’s port, and the Georgia Ports Authority is trying to capture that interest for the long term, Toma said.
Employment in the tourism and hospitality sectors passed government sector employment about two years ago, Toma added. The education and health sectors surpassed government employment a year ago and the workforce in professional services is “breathing down the neck of government employment,” he said.
“We have seen significant growth in that sector over the last two years,” Toma said, “which makes sense, because there are support type jobs for the economy. It was not too long ago the government sector was the largest employer in our area.”
Jobs in the manufacturing sector are 2,000-3,000 over their low point during the recession, Toma continued.
The forecast for employment growth is about 2.5 percent, and Toma said Effingham’s population growth rate has rebounded nicely at 2.3 percent, higher than state average. At the recession’s nadir, about 3,000 fewer people who live in Effingham had jobs, Toma said.
“That’s painful,” he said.
As employment numbers have rebounded, so have average weekly wages from their 2010 low point, from $669 to $737, exceeding the growth of the rest of the Savannah MSA and the state.
The school system also has had a growth wave to start the 2015-16 academic year. Enrollment is up at the county’s elementary and high schools, with the two high schools adding 145 students over the previous year at the same time. The two elementary schools with most new students are Marlow and South Effingham.
On day 8 of this school year, compared to last school year’s day 8, the system had 254 more students, a 2.3 percent increase.
“Growth is taking place again,” said Superintendent Randy Shearouse.